Systemic aspects of agricultural investments: regional variability and sector-specific characteristics in cost efficiency

This paper explores whether the impacts of long-term investments on efficiency vary significantly across different regions and sectors of agricultural production. By delving into these complexities, this study seeks to determine if these factors should be integral considerations in the formulation of policies and strategies aimed at improving the efficiency and resilience of the European agricultural system. To address this, the study employs mathematical and statistical analyses of data from the Farm Accountancy Data Network (FADN) covering 2014-2020. The findings reveal that the diverse behaviors of agricultural systems across various regions and sectors present unique challenges in efficiency analysis. The results indicate that (i) incorporating regional and sector-specific variability provides a more comprehensive and nuanced understanding of the factors influencing the agricultural cost efficiency of EU farm groups; (ii) emphasizing the systemic aspects of agricultural investments and adopting a system thinking approach in evaluations ensures more accurate and meaningful assessments of investments, interventions, and their impacts. Keywords: agricultural investments, system thinking, cost efficiency, DEA, model performance