An assessment of the governance efficiency of agricultural farms

  • Hrabrin Bachev Institute of Agricultural Economics
Keywords: governance, efficiency, farm, transaction costs, assessment, inputs supply, marketing, Bulgaria

Abstract

Despite the fundamental progression of the theory of economic organizations, Farm continues to be studied as a "production function" and its efficiency is assessed with "factors productivity". The report incorporates the New Institutional Economics and adequately defines and assesses the economic efficiency of Bulgarian farms. If inputs supply and marketing transactions of a farm are governed effectively (equal or fewer costs compared to another farm/organization), it is considered to be efficient, and vice versa. First in kind quantitative evaluation of governance efficiency of Bulgarian farms is made on the basis of assessments of managers of typical farms. "Nature of the problems in effective organization for major type farm transactions for securing needed factors of production and output realization" is used as an indicator for the comparative transaction costs. The study has found that the governance efficiency of farms is at a Good level but 60 % of all farms are with a Low efficiency and will likely cease to exist in near future. Major factors for inferior governance efficiency of farms are unsatisfactory efficiency in Supply of Necessary Labour, Innovations and Know-how, and Funding. There is a huge variation in governance efficiency of farms with different specializations as holdings in Field crops, Vegetables, Flowers and Mushrooms, and Mix livestock demonstrate the lowest levels. There is a big discrepancy between the new assessment and the dominating traditional approach to farm efficiency. The suggested framework has to be improved and widely applied in economic analysis at various levels, which require the collection of a novel type of micro-data on farms governance and transaction costs

Downloads

Download data is not yet available.

References

Family Farming in Europe: Challenges and Prospects (2014). European Parliament.
Hoppe, B. (2021). Diverse Family Farms Are Important to U.S. Agriculture. Economic Research Service in Farming Research and Science. USDA.
Sykuta, M. E., Cook, M. L. (2001). A New Institutional Economics Approach to Contracts and Cooperatives. American Journal of Agricultural Economics, 83 (5), 1273–1279. doi: http://doi.org/10.1111/0002-9092.00278
Gaviglio, A., Filippini, R., Madau, F. A., Marescotti, M. E., Demartini, E. (2021). Technical efficiency and productivity of farms: a periurban case study analysis. Agricultural and Food Economics, 9 (1). doi: http://doi.org/10.1186/s40100-021-00181-9
Gunes, E., Guldal, H. T. (2019). Determination of economic efficiency of agricultural enterprises in Turkey: a dea approach. New Medit, 18 (4). doi: http://doi.org/10.30682/nm1904h
Alem, H., Lien, G., Hardaker, J. B. (2018). Economic performance and efficiency determinants of crop-producing farms in Norway. International Journal of Productivity and Performance Management, 67 (9), 1418–1434. doi: http://doi.org/10.1108/ijppm-01-2018-0026
Bachev, H. (2004). Efficiency of agrarian organizations. Farm Management and Rural Planning, 135–150.
James, H. S., Klein, P. G., Sykuta, M. E. (2011). The adoption, diffusion, and evolution of organizational form: insights from the agrifood sector. Managerial and Decision Economics, 32 (4), 243–259. doi: http://doi.org/10.1002/mde.1531
Massey, R., Sykuta, M., Pierce, V. (2020). Contracts in agriculture. Farm management. University of Missouri. Available at: https://extension.missouri.edu/media/wysiwyg/Extensiondata/Pub/pdf/agguides/agecon/g00312.pdf
Asfaw, M., Geta, E., Mitiku, F. (2019). Economic Efficiency of Smalholder Farmers in Wheat Production: The Case of Abuna Gindeberet District, Western Ethiopia. Review of Agricultural and Applied Economics, 22 (1), 65–75. doi: http://doi.org/10.15414/raae.2019.22.01.65-75
Sisay, D., Jema, H., Degye, G., Abdi Khalil, E. (2015). Technical, allocative, and economic efficiency among smallholder maize farmers in Southwestern Ethiopia: Parametric approach. Journal of Development and Agricultural Economics, 7 (8), 282–291. doi: http://doi.org/10.5897/jdae2015.0652
Skarżyńska, A. (2019). Economic Size and Production Efficiency of Farms Specializing in Field Crops in Poland. Problems of Agricultural Economics, 1 (358), 64–87. doi: http://doi.org/10.30858/zer/104385
Koteva, N. (2014). Agricultural Farms Economic Effectiveness in Bulgaria. Agricultural Economics and Management, 59 (2), 20–32.
Kopeva, D., Ivanova, N. (2008). Efficiency and Sustainable Development of Bulgarian Farms (On the Basis of Cereal, Fruit and Vegetables Production). Management and Sustainable Development, 3-4 (2), 128–133.
Zaimova, D. (2011). Methods for Assessing Economic Efficiency of Agricultural Farms. Economic Thought, 2, 81–94.
Agricultural Census, 2020. Ministry of Agriculture, Food and Forestry (2021). MAFF.
Furuboth, E., Richter, R. (2000). Institutions and Economic Theory: The Contribution of the New Institutional Economics. Ann Arbor: The University of Michigan Press.
Williamson, O. (1996). The Mechanisms of Governance. New York: Oxford University Press, 429.
Bachev, H. (2010). Management of Farm Contracts and Competitiveness. VDM Verlag Dr. Muller.
Bachev, K., Tsuji, M. (2001). Governing of Agrarian Transactions. Management and Rural Planning, 2, 185–202.
Georgiev, M., Roycheva, A. (2017). New institutional economics and methods for measuring the adaptation of Bulgarian agriculture. Trakia Journal of Science, 15 (1), 199–205. doi: http://doi.org/10.15547/tjs.2017.s.01.037
Bachev, H. (2010). Governance of agrarian sustainability. New York: Nova Science Publishers.
Bashev, H. (2012). Efficiency of Farms and Agrarian Organizations. Economic Thought journal, 4, 46–77.

👁 64
⬇ 28
Published
2022-03-30
How to Cite
Bachev, H. (2022). An assessment of the governance efficiency of agricultural farms. Technology Transfer: Innovative Solutions in Social Sciences and Humanities, 3-8. https://doi.org/10.21303/2613-5647.2022.002326
Section
Business, management and accounting