Dynamics of the total factor productivity in Lithuanian family farms

Abstract

This paper analyses the total factor productivity in the Lithuanian agricultural sector, namely family farms reporting to the Farm Accountancy Data Network. More specifically, the Malmquist productivity index and data envelopment analysis are employed to analyze productivity changes and thus define respective policy implications. The research covers the period of 2003–2009. The four output indicators were employed for DEA, namely land productivity, labour productivity, return on assets, and intermediate consumption productivity. The analysis showed that the total factor productivity in the Lithuanian family farms had been decreasing throughout 2004–2005, and has been recovering by 1.3–8.1 per cent annually. However, technical change contributed to the increase in the total factor productivity rather insignificantly.