Title : Technical environmental efficiency in agricultural fertilizer management in the context of overinvestment - A case study from Poland
Abstract:
Caring for the climate is a guarantee of providing good quality food (DaMatta et al. 2010; Vågsholm et al. 2020). Its changes can negatively affect agricultural productivity (Lobell and Gourdji 2012; Sarker et al. 2023) and, consequently, its profitability (Hertel and Rosch 2010; Suresh et al. 2021). One of the reasons for the negative impact of agriculture on the environment is the use of fertilizers and pesticides (Zmy?lona et al. 2023), which, when used in excessive quantities, cause pollution that is harmful to the climate and ecosystem (Erisman et al. 2013). This is why sustainable food production is so important (Yetgin 2023). Analysis of the technical environmental efficiency of farms, or analysis of environmental issues using technical efficiency, has been used in studies by Cillero and Reaños (2023), Taoumi and Lahrech (2023), Adenuga et al. (2020), Kuhn et al. (2020) Adenuga et al. (2018), Reinhard et al. (2000), among others. Particularly relevant to the study at hand was the work of Cillero and Reaños (2023), who included a 4th factor in addition to the 3 factors of production in the production function as intermediate inputs. This paper focuses on the impact of fertilizer management on the environment through an analysis of technical environmental efficiency performed by stochastic frontier analysis using sfpanel in STATA 15 software, with a breakdown of the levels of overinvestment of farms in Poland determined by the author's method. Assessing the scale of the phenomenon of overinvestment is extremely important because of the ongoing changes in Polish and global agriculture where it is proving to be increasingly common (Guan et al. 2009, Staniszewski 2015). In the context of the efficiency of fertilizer management, one can point out the dependence of whether farms that are more overinvested, also apply fertilizers in an irrational way, which negatively affect the environment, and in the long run can reduce the quality of yields. A total of 3273 Polish farms were surveyed to analyze technical environmental efficiency. The panel data are from 2010-2019.
It was proved that the increase in efficiency in the last year in relation to T0 (2010 - the first year analyzed) occurred only in farms investing optimally and investing optimally without an increase in technical armament of labor. The highest decrease in technical efficiency was observed in farms overinvesting relatively. However, these are also the farms with the highest TE rate among the analyzed investment levels in most of the years studied. This state of affairs may be due to the fact that these are farms where both labor productivity and technical equipment are increasing, and they may be farms that invest optimally in the future. What is surprising is their large decline in technical efficiency. However, this may be influenced by unsustainable fertilizer management and unsustainable use of crop protection products. Underinvested farms had the lowest technical efficiency. Lack of investment also resulted in low environmental efficiency.
Audience Take Away:
- Recipients will learn what overinvestment in farms is and how it can be measured.
- The study proposes a model in which, in addition to the 3 basic factors of production, there is a 4th, which in this case (agricultural production) is fertilizers and plant protection products. Other lecturers may also consider creating such a model.
- The study combines agriculture, economics and environmental issues. This, in the context of increasing concern for the environment and at the same time rising production costs, is important for both researchers and practitioners. The presentation will contribute to research on farm investment as well as environmental economics.
