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Farm Level Performance identifying common factors determining levels of performance - DO0113

Description
This research project is intended to provide in-depth analysis, case studies and commentary on the characteristics associated with different levels of farm business performance, in particular, high performance. The study specifically seeks insights from farmers and longitudinal farm business data to ascertain the factors influencing the performance of farms and the motivations for, and barriers to, adopting measures aimed at enhancing business performance. It will also seek to provide key transferable messages and examples to encourage a focus on farming performance by all farms.
Objective
This research is intended to inform the first of Defra’s strategic business plan objectives to: Support and develop British farming and encourage sustainable food production and, more specifically, to help to enhance the competitiveness and resilience of the whole food chain, including farms and the fish industry, to help ensure a secure, environmentally sustainable and healthy supply of food with improved standards of animal welfare.

Enhancing farm competitiveness and resilience requires long term performance improvements that could encompass management decisions as well as a focus on improving input-output and resource use efficiency. Although we understand much about the factors that influence at a macro scale e.g. prices, exchange rates etc we do not have a clear understanding of the farm level factors that come together to ensure that a business remains amongst the top performers in the industry or remains consistently mid- or lower performing.

The Farm Business Survey reports according to performance bands and this project seeks to understand key determinants of why some farms are consistently high performing and others average performing and what drives changes between groups over time. There is no single agreed definition of farming performance as this can encompass input-output efficiency, productivity and profitability. Understanding farm level performance and technical efficiency is important in the context of developing future policies to facilitate a resilient and competitive agricultural sector.

One example of an approach was in recent research commissioned on agricultural efficiency at the farm level which has underlined the complexity of different systems and contexts. This research used data from the Farm Business Survey (FBS) and the EU Farm Account Data Network (FADN) to model comparisons of efficiency across farm types (and between countries) and to identify the characteristics of those most efficient. These two data sources robustly quantify outputs and inputs but also provide various indicators for measuring the drivers of efficiency. Initial conclusions from the study suggested that most farm types have relatively high (and improving) levels of technical efficiency (with specialisation and risk appearing to be contributory factors). Of interest for this study was that there is some consistency in performance with an average of 60% of the farms in each farm type remaining in the same performance band each year. The data will be made available as this will serve as a relevant comparator and context. To build on these initial findings the expert informal advisory group recommended that a more qualitative study would provide further insight, e.g. through interviewing techniques, to fully appreciate the nuances of management and performance which may be hidden or explained within the raw FBS data.
Project Documents
• FRP - Final Report : Farm Level Performance 2012   (727k)
Time-Scale and Cost
From: 2011

To: 2012

Cost: £42,103
Contractor / Funded Organisations
University of Nottingham
Keywords