Data envelopment analysis application in agricultural production efficiency analysis

Paper presents wheat production efficiency analysis based analysis on data of five agricultural enterprises representing five growing regions of Slovakia. In the analysis a non-parametric method of Data Envelopment Analysis was applied. DEA is a tool which enables us to evaluate relative efficiency of decision-making units on the basis of mutual comparison of all unit's input-to-output transformation. DEA solution provides unambiguous distinction of efficient and inefficient units. It is given by an efficiency index which varies within the range [0,1]. If the efficiency index is less than one then the given unit is inefficient. Different indices provide an efficiency rating of inefficient units. If a unit is efficient then its efficiency index is equal one. Since all efficient units have the same efficiency index, basic version of DEA does not enable ranking of efficient units. In the paper a modified version of DEA is applied which provides a framework for ranking efficient units based upon comparison of efficient units relative to a reference technology spanned by all other units.