Effects of the European Union Farm Credit Programs on Efficiency and Productivity of the Greek Agricultural Sector: A Stochastic DEA Application

This study examines technical efficiency and productivity growth of Greek farms participating in the 1994 European Union Farm Credit Programs (1994-EU-FCP), i.e. regulation 2328/91. In this paper, two farm-level economic data sets are used, i.e. the crop and the livestock data set, where each one consists of two different groups of farms: one group contains farms participating in the 1994-EU-FCP while the other one contains non-participating farms. The data sets are observed over the 1993 and 1997 years. The paper uses the approach developed by Simar and Wilson (1998a, b) to bootstrapping both DEA efficiency measures and Malmquist productivity indices. Furthermore, the present paper uses the Malmquist index decomposition proposed by Simar and Wilson (1998b) and Zofio and Lovell (1997) to investigate the sources of productivity change. The technical efficiency score results indicate that, in terms of the crop oriented farms, the program failed to increase the efficiency of the participated farms even though the most efficient farms entered the 1994-EU-FCP. In contrast, in terms of the livestock oriented farms, the program managed to increase the efficiency of the participated farms though less efficient farms entered the program. The total factor productivity growth results, in terms of crop-oriented farms, show statistically significant decline of productivity for the group of program farms but a statistically significant increase for the group of non-program farms. The total factor productivity growth results, in terms of livestock oriented farms, show a statistically significant increase of productivity for the group of program farms but no change for the group of non-program farms.

Keywords: Bootstrap, data envelopment analysis, productivity, farm credit program.