Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Productivity, efficiency and structural problems in Chinese dairy farms

Productivity, efficiency and structural problems in Chinese dairy farms Purpose – The purpose of this paper is to identify the structural problem in the Chinese dairy sector. There exists a large number of low‐efficiency, small‐scale farms, and productivity inequality between small and large farms keeps increasing, which is a possible driving force behind the Melamine scandal in 2008. Design/methodology/approach – Using the stochastic frontier production function, this paper estimates and compares the changes in technology and technical efficiency between backyard, small‐scale, medium‐scale and large‐scale dairy farms in China over the period between 2004 and 2008. Findings – There are compensating effects between technology and technical efficiency. However, low yield for backyard farms is mainly caused by traditional low‐yield varieties, even though the technical efficiency is very high, which cannot compensate for the low technology. Research limitations/implications – The author put the assumption of constant return to scale mainly due to the data availability. Such an assumption implies that there are no scale‐effects between the different scales in productivity, and the productivity difference is explained by technology and technical efficiency. Practical implications – In order to solve the structural problems, Chinese governments should help small‐scale farmers to adopt new high‐yield varieties, to subsidize small‐scale farmers, and to train farmers to master the complicated skills for raising high‐yield varieties. Originality/value – The paper gives another possible explanation for the Melamine scandal of milk powder in 2008. If the structural problem cannot be solved, similar food safety scandals could happen once again. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png China Agricultural Economic Review Emerald Publishing

Productivity, efficiency and structural problems in Chinese dairy farms

China Agricultural Economic Review , Volume 4 (2): 8 – May 4, 2012

Loading next page...
 
/lp/emerald-publishing/productivity-efficiency-and-structural-problems-in-chinese-dairy-farms-l8pauEkNDV
Publisher
Emerald Publishing
Copyright
Copyright © 2012 Emerald Group Publishing Limited. All rights reserved.
ISSN
1756-137X
DOI
10.1108/17561371211224755
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to identify the structural problem in the Chinese dairy sector. There exists a large number of low‐efficiency, small‐scale farms, and productivity inequality between small and large farms keeps increasing, which is a possible driving force behind the Melamine scandal in 2008. Design/methodology/approach – Using the stochastic frontier production function, this paper estimates and compares the changes in technology and technical efficiency between backyard, small‐scale, medium‐scale and large‐scale dairy farms in China over the period between 2004 and 2008. Findings – There are compensating effects between technology and technical efficiency. However, low yield for backyard farms is mainly caused by traditional low‐yield varieties, even though the technical efficiency is very high, which cannot compensate for the low technology. Research limitations/implications – The author put the assumption of constant return to scale mainly due to the data availability. Such an assumption implies that there are no scale‐effects between the different scales in productivity, and the productivity difference is explained by technology and technical efficiency. Practical implications – In order to solve the structural problems, Chinese governments should help small‐scale farmers to adopt new high‐yield varieties, to subsidize small‐scale farmers, and to train farmers to master the complicated skills for raising high‐yield varieties. Originality/value – The paper gives another possible explanation for the Melamine scandal of milk powder in 2008. If the structural problem cannot be solved, similar food safety scandals could happen once again.

Journal

China Agricultural Economic ReviewEmerald Publishing

Published: May 4, 2012

Keywords: China; Agriculture; Farms; Productive capacity; Chinese dairy farmers; Productivity; Technical efficiency; Structural problems

References