Tag Archives: FRM

1404–1417 R. Põldaru and H. Luik-Lindsaar
The impact of herd health on the efficiency of dairy farms
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The impact of herd health on the efficiency of dairy farms

R. Põldaru and H. Luik-Lindsaar*

Estonian University of Life Sciences, The Institute of Economics and Social Sciences, Fr. R. Kreutzwaldi 1A, EE51006 Tartu, Estonia
*Correspondence: helis.luik@emu.ee

Abstract:

Maximization of profit is one of the main interests of any farmer. Profit depends on managerial decisions and many economic factors, but also on the health of the herd. Thus, it is important to study how different factors related to herd health impact farms’ economic performance. The objective of this paper is to determine how herd health influences farm technical efficiency by comparing Estonian farm data from two periods, the years 2012 and 2017. Typically, the major herd health issues are related to udder problems, followed by reproduction issues and limb disorders. We used the FADN (Farm Accounting Data Network) database and data from Estonian Livestock Performance Recording Ltd. The two-stage mathematical approach was chosen as the research method. In the first stage the DEA (Data Envelopment Analysis) was used to estimate farms’ technical efficiency. The output-oriented VRS (Variable Returns to Scale) approach was applied to the data of 64 farms. In the second stage, we used the FRM (Fractional Regression Model) to define which the technical efficiency drivers were among herd health and economic factors. The study revealed that major changes have occurred between the two periods analysed. The main herd health factors influencing farms’ technical efficiency are the somatic cell count (SCC) and age at first calving.

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806-820 H. Luik-Lindsaar, R. Põldaru, A. Põder and J. Roots
Performance evaluation of rural areas: the case of Estonian rural municipalities before the administrative reform
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Performance evaluation of rural areas: the case of Estonian rural municipalities before the administrative reform

H. Luik-Lindsaar*, R. Põldaru, A. Põder and J. Roots

Estonian University of Life Sciences, Institute of Economics and Social Sciences, Kreutzwaldi 1, EE51014 Tartu Estonia
*Correspondence: helis.luik@emu.ee

Abstract:

Estonian municipalities have recently passed an administrative reform that has resulted in the reorganisation of municipal management and decreased the number of municipalities. Unfortunately, no thorough scientific research has been done to find out whether the emerging helps to increase the efficiency. The aim of this paper is to estimate the efficiency of Estonian rural municipalities and to identify the factors that influence their efficiency. In this study we use a two stage analysis. In the first stage, we use the DEA Slacks-Based Model’s (SBM) output-oriented approach. In the second stage, we use the Fractional Regression Model (FRM) to determine relevant exogenous factors that are associated with efficiency. 170 Estonian rural municipalities have been analysed. According to the DEA results, 28% of municipalities (48) are efficient, the average efficiency of municipalities is 0.762. The analysis implies that there are considerable differences between smaller and larger rural municipalities. FRM results revealed that larger share of subsidies characterize inefficient municipalities. The weaker the municipality, the more state support the municipality must receive. A larger share of people with a higher education increases the efficiency, it is related to higher salaries and therefore higher revenue to the municipality. Elderly residents in the population increases the efficiency, however it isn’t sustainable in the long-run because more inputs are needed to offer various public services. The results indicate that the further away a municipality is from the capital, the more inefficient the municipality becomes.

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