Drivers of Farm Performance

Abstract

This report contains an empirical analysis of the productivity and sustainability performance of different types of farms in thirteen countries. Farm productivity performance is measured through estimates of average productivity levels and through annual rates of technical change. Evidence on the environmental sustainability of farm groups is based on an index that reflects environmental pressure per hectare and the local environmental sustainability of production practices. In addition to environmental sustainability, the analysis also considers fundamental differences across farms with respect to farm structure, innovation of operations, individual characteristics as well as farm location. Productivity performance by farm classes is related to the environmental sustainability performance and to other farm characteristics in order to shed light on the factors that drive or impede farm performance. Empirically identifying the main conditions for and obstacles to performance improvement supports the development of effective and efficient policies targeting the performance of farms. This analysis contributes in particular to a better understanding of the synergies and trade-offs between productivity and environmental sustainability performance.