Analysis of technical efficiency in milk production: a cross-sectional study on Turkish dairy farming

ABSTRACT We analyzed the efficiency of farmers in the dairy production using cross-sectional data collected from 92 sample dairy farmers in the West Mediterranean Region of Turkey. The study used the Stochastic Frontier Analysis (SFA) to measure the technical efficiency of farmers in milk production. The technical efficiency of the sample of dairy farms ranged from 0.30 to 1.00. The mean efficiency of the sample of farmers was 0.55, indicating the presence of substantial scope for improving the competitiveness of dairy sector in the region by improving the efficiency of farmers. While some of these variations could be attributable to random factors, we calculated that 97.3% of the variations was attributable to the inefficient use of inputs, leaving only 2.7% to random factors. This shows the possibility of increasing average output by about 0.45 without the use of additional inputs. The most significant factors affecting the efficiency of dairy production were household size, total number of cattle, and ratio of the total number of dairy cows to total number of cattle, technological level, barn type, and production of maize silage. This study, by measuring the levels of efficiency and by identifying factors explaining the differences in efficiency, gives useful information for designing policy interventions targeting to improve the competitiveness of the Turkish dairy sector.