The role of green total factor productivity to farm-level performance: evidence from Norwegian dairy farms

In the economics literature, measuring the performance of a dairy farm with a total productivity index is common practice. Previous research, on the other hand, has been chastised for failing to account for agricultural emissions in their models when calculating resource use productivity. This study estimated green total factor productivity (GTFP) accounting for dairy farms' CH4 emission to the model. The study is based on unbalanced panel data from 692 specialized dairy farms from 1991 to 2020. To estimate GTFP and its components using multiple input-output environmental production technologies, a stochastic input distance function and a Translog model were used. The average annual growth rate of green production over the research period was 0. 032%. The main reason for the increase in GTFP was positive scale change contributions. Technological change (- 0.031% per year) and efficiency change (- 0.002% per year), on the other hand, had a detrimental effect on GTFP.

Automated summary

This study estimated green total factor productivity (GTFP) considering CH4 emissions from dairy farms. The research used unbalanced panel data from 692 specialized dairy farms from 1991 to 2020 and applied stochastic input distance function and Translog model to estimate GTFP and its components. The study found that the average annual growth rate of green production was 0.032%, with positive scale change contributing to the increase in GTFP, while technological change and efficiency change had detrimental effects on GTFP.