Assessing Determinants of Technical Efficiency in Livestock Production: A Case Study from Shaanxi, China

The demand for livestock products is rising, and China is actively encouraging farmers to increase their livestock production to meet this growing demand. At Shaanxi Province’s livestock industry’s current production output and growth rate, it appears unfeasible to meet the government’s production target for 2025. Inefficiencies within livestock production can significantly impede the development of this industry. Therefore, this research employs the Data Envelopment Analysis (DEA) technique, considering Constant Returns to Scale (CRS) and Variable Returns to Scale (VRS) assumptions, to assess the technical efficiency of the livestock industry in Shaanxi Province. The data utilised are secondary data from 2010 to 2019. The findings reveal that the Shaanxi livestock industry has an average technical efficiency of 0.84 (CRS) and 0.92 (VRS), suggesting that there is room for further production growth with the current inputs, breeding scales and technology. Although dairy cows, cattle and goats have achieved full technical efficiency. Technical and scale inefficiencies still exist in hog and layer farming practices, which can be improved to increase production. Notably, hog farming demonstrated the lowest technical efficiency, scoring 0.68. The results of factors affecting inefficiency suggest that increasing spending on disease prevention and raising the selling price can both improve technical efficiency. Additionally, reducing death loss has the potential to improve technical efficiency. Thus, the government is expected to promote farm consolidation and expansion while actively advocating for establishing livestock production cooperatives.