Technical inefficiency of Dutch vegetable farms: Specific-input analyses

Area of Science:

• Agricultural Economics
• Environmental Science
• Operations Research

Background:

• Farm technical efficiency is a key driver of farm survival, growth, and industry structure.
• Understanding input inefficiencies is crucial for improving farm competitiveness and environmental sustainability.
• Dutch indoor vegetable farming faces unique challenges related to resource management.

Purpose of the Study:

• To compute technical inefficiency scores for key inputs (output, energy, materials, pesticides, fertiliser) in Dutch indoor vegetable farms.
• To identify producer-specific characteristics associated with technical inefficiency.
• To provide insights for enhancing farmer capacity and reducing environmental impact.

Main Methods:

• Data Envelopment Analysis (DEA) was used to calculate technical inefficiency scores.
• A bootstrap truncated regression model analyzed the relationship between farm characteristics and inefficiency.
• The study covered a sample of Dutch indoor vegetable farms from 2006-2016.

Main Results:

• Average technical inefficiency was substantial: 14% for energy, 23% for materials, 24% for pesticides, and 22% for fertilisers.
• Higher degrees of specialization were found to increase technical inefficiency for variable inputs.
• While age, debt, and subsidies showed statistical significance, their economic impact on inefficiency was minimal.

Conclusions:

• Farmers can enhance competitiveness and mitigate environmental harm by improving input efficiency.
• Addressing specialization-related inefficiencies is critical for the Dutch indoor vegetable sector.
• Targeted capacity building can lead to reduced input overuse and a more sustainable agricultural industry.