A Note On Measuring And Comparing The Competitiveness Of Heterogeneous Production Systems In Agriculture

The measurement of competitiveness in agriculture is often based on data for average or ‘typical’ farms. However, if the farms that are summarised in this manner are highly heterogeneous, inferences based on this measurement can be very misleading. In this paper we focus on the measurement of competitiveness in heterogeneous production systems, using Domestic Resource Cost (DRC) and Social Cost-Benefit ratio (SCB) as competitiveness indicators, based on the population of crop farms in Ukraine as an example. We propose the calculation of competitiveness indicator distributions based on micro data using kernel methods. This procedure makes it possible to determine for each product a) what proportion of the farms producing it is competitive, and b) what proportion of total production/output value of this product occurs on competitive / non-competitive farms. Furthermore, based on micro-data we propose and contrast distribution- and aggregate-based approaches for ranking the activities.