Technical efficiency and technology adoption: a study of organic farming in the French dairy sector

Overview & Synopsis

Using original survey data from France we study the importance of technical efficiency as a potential determinant of farm conversion to organic farming in the dairy sector. We run a two-stage analysis. In the first stage we calculate technical efficiency of farms when they were conventional (including organic farms before they convert) as well as technical efficiency change indices, using Data Envelopment Analysis and correcting for sample bias with Simar and Wilson’s bootstrapping procedure. In the second stage, we estimate a Probit model to explain the decision of farmers to convert to organic farming. The model is estimated on a sample of 209 farmers. We find that farmers who switched to organic farming were more technically efficient (before conversion) than farmers who remained conventional, but they had experienced a slowdown in technical efficiency (also before conversion).