An Economic Efficiency Analysis Of China Dairy Farms

Since the policy of reform and open putting into practice the number of milch cow has increased from 480000 to 8932000 and the output of raw milk has risen 16.40 times. But compared with the grow speed of milk consumption and dairy produces processing the grow speed of raw milk is too low to maintain the development of whole industry. The inconsistency of raw milk production and processing and dairy produces consumption is increasingly aggravated. Raw milk production has become one of the choke points of the development of dairy industry.Increasing the efficiency or improving the technique can advance productivity level. Boosting the raw milk production may depend on either technique enhance or advancing economic efficiency. The dissertation studies on the economic efficiency of raw milk production. The aim of the paper is to measure the technical efficiency and allocative efficiency of China dairy farms and analysis the influence factors of the efficiency. At the end of the paper policy suggestions are put forward.At present, the farms breeding less 19 cows are the main part in China. They count the 97.9% of all the raw milk producers and produce 64.9% of all the raw milk production. We select 702 sample farms in Heilongjiang province Shanxin province Neimenggu municipality, Sichuan provinc and Beijing city Tianjin city. The results of stochastic frontier analysis (SFA) method are follows. Enlarging the size of breeding can increase the technical efficiency and allocative efficiency. The farmer who cultivate the cattle longer the higher technical efficiency and allocative efficiency he has. Adding more coarse fodder and attending extentions can only improve technical efficiency, while education level is just the influence factor of allocative efficiency. Farms at suburbs have lower technical efficiency and allocative efficiency than others, while farms of Shanxi province have higher technical efficiency and allocative efficiency than others. And farms of Heilongjiang and Sichuan province have higher technical efficiency than the farms at other places.Compared with the state-owned farms, the ones owned by fanner has lower cost, higher cost benefit ratio and less slacks. From 1998 to 2003 the TFP of farmers owned by farmer is increasing with the increasing of pure technical efficiency and technique progress. On the other hand the TFP of state-owned farms is decreasing with pure technical efficiency descendant and technique setback. So we conclude that during the last six years the farms owned by farmers play better than the state-owned farms.Finally, five policy suggestions are forward.