EFFICIENCY AND PRODUCTIVITY OF BULGARIAN FARMS

Kr. Kaneva

Abstract: In this paper, DEA (Data Envelopment Analysis) is applied to estimate technical, allocative and economic efficiency of Bulgarian farms. The variables used in the model are gross output, land and labour for 2011. DEA results show that there is
an extensive use of land and labour inputs, which leads to technical inefficiency. The allocative efficiency exceeds the total economic efficiency, indicating that at the given input prices farms have to decrease the amount of inputs in order to improve their efficiency. The Malmquist TFP Index is employed to analyze productivity changes during the period 2005–2013. The variables are gross output, intermediate consumption, depreciation costs and total costs for labor, land and capital. The analysis reveals that the total factor productivity decreases by 18% on average, mainly due to regression in technical change, but tends to recover. Technical efficiency slightly increases, by 2.2%. The total factor productivity grows by 3%, when annual price indices are used to deflate the value of output and inputs used in the model.

Keywords: Bulgaria; efficiency; productivity

Date published: 2017-08-18