Technical and Environmental Efficiencies of Ontario Dairy Farming Systems

Abstract

This thesis estimates technical and environmental efficiencies for a sample of Ontario dairy farms and examines the relationship between these efficiency measures and characteristics of the farm and farmer. Using a stochastic input distance function to estimate the production relationship between four inputs and four outputs (one of which is greenhouse gas emissions), we find that the Ontario dairy farms have a high level of average technical efficiency but relatively low environmental efficiency. There is a positive and significant correlation between technical and environmental efficiencies. Environmental efficiency measure increases with herd size. The findings suggest there is not a trade-off between technical and environmental efficiency for Ontario dairy farms. Instead, reducing the amount of inputs used to produce a given amount of milk will also reduce greenhouse gas emissions.