Horizontal integration, production systems and technical efficiency in pork production: evidence from Polish pig farms

Abstract Pork production in Poland has declined sharply despite its important role in the EU. This study assesses whether horizontal integration via producer groups improves farm efficiency, using 2016–2023 panel data for Polish pig producers. We apply a true random effects stochastic frontier model (TRE-SFA) combined with Augmented Inverse Probability Weighting (AIPW). The TRE-SFA results indicate that producer group membership is associated with lower dispersion of the half-normal inefficiency component, i.e., lower inefficiency levels. The AIPW estimates suggest that, conditional on observed covariates, producer group membership is associated with a 2.2%-point higher technical efficiency score, which represents over 18% of the average efficiency gap. The positive effect of integration is observed mainly for farms operating within a closed-cycle system (farrow-to-finish system). The results point to a potentially positive but context-dependent role of producer groups. To foster sectoral resilience, policies should promote cooperative practices, empower local leadership, and strengthen agricultural advisory services to support group formation and integration.