Technical Efficiency Estimates of Scottish Agriculture: Evidence from the dairy, sheep and cereals sector

Technical efficiency, the ratio of physical inputs to outputs, is a popular means of assessing agricultural performance. Benchmarking of these efficiencies is a fundamental tool for the farming industry. More sophisticated techniques have been developed recently which offer a greater degree of complexity for measuring technical efficiency. This paper adopts a parametric approach, referred to as stochastic production frontiers (SPF), to study three major sectors the Scottish agricultural economy, namely i) cereals, ii) dairy, and iii) sheep, over the period 1989 to 2004.