Custos e Agronegocio, vol.11, no.3, pp.106-115, 2015 (SCI-Expanded)
The dairy sector plays a considerable role in the agricultural sector and is major source of household income for many farmers in Turkey. This study aims to estimate the technical efficiency for dairy farms in Hatay province of Turkey. The data obtained from 138 dairy farms, were analysed using the Data Envelopment Analysis (DEA) method. Annual milk production quantity, concentrate feed, roughage feed, veterinary costs, and human labour were used in the analysis as variables of efficiency model. The Tobit Regression Model was used to calculate the DEA scores in order to establish the causes of inefficiencies. According to the results of the DEA model, mean technical efficiency scores estimated for the Constant Return to Scale (CRS) and Variable Return to Scale (VRS) were 0.64 and 0.69, respectively. Inefficiency stems from a certain amount of product which can’t be produced using the minimum input. Efficiencies are positively correlated with herd size, concentrate feed ratio, and farmers’ experience. However, only herd size and concentrate feed ratio are statically significant with a level of 5%. The increased herd size and concentrate feed ratio in total feed will enhance the profitability.