Organic Farming as an Opportunity for Sustainable Growth: A Technical Efficiency Analysis of Slovak Farms

As the European Union aims to mitigate climate change effects through its Green Deal strategy, organic farming has emerged as an important tool in achieving environmental sustainability. Given the EU’s bold objective to transition at least 25% of its agricultural land to organic farming by 2030, the economic performance of such practices requires detailed examination. This paper evaluates the technical efficiency of organic versus conventional farms in Slovakia, based on farm-level data and employing the data envelopment analysis (DEA) methodology. While organic farms often face challenges related to lower yields and reduced productivity, with necessary support at both national and EU levels, they also offer significant environmental and health advantages. Our findings revealed that conventional farms were statistically significantly more efficient than organic farms in case of cow milk production, cereals, beef meat, and sheep meat. Using both radial and non-radial efficiency measure it was also confirmed that inefficiencies can be captured fully by proportional output adjustments and that input/output slacks are negligible. Our results shed light on the performance gap between organic and conventional farms and provide evidence to inform policy makers and strategic support for sustainable agriculture in the EU.