Analysing farming systems with Data Envelopment Analysis: citrus farming in Spain

Farming systems in the Mediterranean agricultural area of Spain are frequently characterised by the small size of the production units and a widespread strategy of externalisation of many growing tasks which could be seen as a way of allowing farms to remain competitive. In this paper, we suggest Data Envelopment Analysis as an appropriate analytical tool to explore the possibilities of short-term viability of individual farms, after eliminating current inefficient practices. From a sample of Spanish citrus farms, we identify the efficient production units that determine the technological or best practice frontier, and we compare their characteristics with those of the average farm. Best practice farms have higher yields than the average farm and are also further advanced in the process of substituting wage-earning labour for family labour. Cutting the employment of the household's labour on its own farm is linked to a strategy of externalisation of citrus growing tasks, in an attempt to surmount the problems posed by the small average size of farms. Finally, we compute an overall efficiency measure and several indicators of short-run competitiveness that compare the ability of farms to generate net income under both current and efficient production plans. Our results show that there is a substantial fall in the number of farms judged economically non-viable after inefficiency has been removed.