Technical Efficiency of Agriculture in the EU and Ukraine : a Stochastic Frontier Analysis Based on Factor Income

This paper evaluates the technical efficiency of agricultural sectors in EU and Ukraine using the Stochastic Frontier Analysis methodology. The analysis is based on factor income as the dependent variable and includes labor input, fixed capital consumption, utilized agricultural area, and intermediate consumption as key inputs. The findings reveal that EU countries on average operate under conditions of nearly constant returns to scale, while Ukraine exhibits increasing returns to scale but low efficiency due to underinvestment. The technical efficiency scores highlight significant disparities, with Western European countries outperforming Eastern counterparts. The results offer important policy implications for enhancing agricultural productivity and guiding investment strategies. [Publisher's Text]