Measurement and Explanation of Technical Efficiency Performance in Ukrainian Agriculture, 1991-1996

By Murova, Olga I.; Trueblood, Michael A. et al. | Journal of Agricultural and Applied Economics, April 2004 | Go to article overview

Measurement and Explanation of Technical Efficiency Performance in Ukrainian Agriculture, 1991-1996


Murova, Olga I., Trueblood, Michael A., Coble, Keith H., Journal of Agricultural and Applied Economics


The present study examines technical efficiency patterns in Ukraine's crop sector for 1991-1996. The economic and policy environment in Ukraine has changed since reform began in 1991. Many policy changes have exerted offsetting economic pressures on efficiency. Enterprise privatization and the liberalization of prices and trade put upward pressure on technical efficiency, whereas start-stop land privatization efforts, unpredictable government intervention, and slow developments in the credit and labor markets put downward pressure on efficiency. We found that technical efficiency appears to have improved slightly over the 1991-1996 period, suggesting that the positive forces had more impact.

Key Words: Data envelopment analysis, enterprise privatization, inefficiency, price liberalization, productivity, stochastic frontier analysis, technical efficiency

JEL Classifications: D29, E23, E66, O38, P32

There is significant interest in Ukraine's agricultural sector, which is often referred to as the "breadbasket of Europe" for its role as a food exporter during the early 20th century. Ukraine, the largest country in Europe in geographical area and the fifth most populous country, is home to one-third of the world's rich black soil and is considered to have great agricultural potential. Agriculture is very important to the Ukrainian economy, accounting for 40% of Ukraine's gross domestic product and employing 20% of its total population.

Among the republics of the former Soviet Union, Ukraine was a major producer of many agricultural commodities. For example, Ukraine's total grain production averaged 46 million tons during the period 1988-1990, nearly half the level produced in Russia and approximately one-quarter of total production in the former Soviet Union (Figure 1). However, by 1998-2000, total grain production had declined to an average of 24 million tons. Similar contractions were observed for sugar beets, fluid milk, beef and veal, pork, and poultry; only the production of sunflower seeds has stayed relatively constant.

There are many questions about whether Ukraine can harness its agricultural potential and recapture its important role in world markets. At the beginning of reform, it was expected that output would contract initially as the reforms were implemented and real prices fell, but, eventually, the sector was expected to recover as productivity and efficiency improved. Although output has fallen, it is unclear whether efficiency in Ukraine's agricultural sector has improved or whether the sector has shown any clear signs of a rebound.

The objectives of the present study were twofold. The first objective was to highlight some of the economic policies in Ukrainian agriculture, which have an unclear net effect a priori, and then to relate these policies quantitatively by measuring technical efficiency performance on corporate and private farms over the 1991-1996 period. We measured technical efficiency as the degree to which producers are able to maximize physical output from given input levels. The second objective was to quantitatively test a particular set of farm level and institutional variables that were found to be important in explaining technical efficiency performance in Ukraine's neighbor, Russia, given that both countries inherited a similar set of policies and circumstances from the Soviet period.

Ukraine's economic environment during the reform period can be characterized as one of drastic price change, as will be highlighted below. This would seem to indicate that it might be more important to measure allocative efficiency (cost minimization, which is a behavioral phenomenon) rather than technical efficiency (a physical phenomenon of producing on the frontier). Although an allocative efficiency study would be welcome in the future (assuming prices are available), there are still good reasons to examine technical efficiency. In Ukraine's case (along with Russia and several other countries in transition), the price liberalization shock was quite severe. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Measurement and Explanation of Technical Efficiency Performance in Ukrainian Agriculture, 1991-1996
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.