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Open AccessArticle

Efficiency and Sustainability in Farm Diversification Initiatives in Northern Spain

1
Department of Accounting, Faculty of Economics and Business Administration, University of Oviedo, 33006 Oviedo, Spain
2
Department of Economics, Faculty of Economics and Business Administration, University of Oviedo, 33006 Oviedo, Spain
*
Author to whom correspondence should be addressed.
Sustainability 2020, 12(10), 3983; https://doi.org/10.3390/su12103983
Received: 5 March 2020 / Revised: 24 April 2020 / Accepted: 11 May 2020 / Published: 13 May 2020
(This article belongs to the Special Issue Smart Farming and Sustainability)
The value-added diversification strategy provides an option for guaranteeing the sustainability of small farms. This study examines how factors related to managerial strategy and socio-environmental sustainability influence the efficiency of diversification initiatives. For this purpose, we use a novel and unique database of value-added ventures implemented by 49 dairy farms located in northern Spain. We construct a production frontier using a Data Envelopment Analysis (DEA) model to estimate technical efficiency. The mean technical efficiency of the initiatives was 0.56 and 0.59 for the constant and variable returns specifications, respectively. Determinants of efficiency are analyzed with a two-step procedure with a double bootstrap. We find that the elaborations of more complex products other than fresh milk are negatively associated with efficiency. However, specialization in one product with different variants and direct sales both have a positive association with efficiency. In terms of socio-environmental variables, there is a positive association between efficiency and the use of quality schemes such as ‘protected designation of origin’ (PDO), the use of organic labelling and the farmer having university education, and a negative association with the percentage of family labor. Our findings support the idea that value-added diversification contributes to more resilient pathways of development and underlines the importance of good quality management of marketing and operational factors. View Full-Text
Keywords: dairy farmers; diversification strategy; niche markets; data envelopment analysis (DEA); efficiency dairy farmers; diversification strategy; niche markets; data envelopment analysis (DEA); efficiency
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MDPI and ACS Style

García-Cornejo, B.; Pérez-Méndez, J.A.; Roibás, D.; Wall, A. Efficiency and Sustainability in Farm Diversification Initiatives in Northern Spain. Sustainability 2020, 12, 3983.

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