Technical efficiency in fresh fruits and vegetables sector: a compared study of Italian and Spanish firms

Agricultural cooperatives play an important socio-economic role in European (EU) countries, especially in the fresh fruits and vegetables sector. For this reason, in an economic perspective, the measurement of their efficiency has become an area of investigation which attracts great interest. Given that Spain and Italy are the biggest producers of fresh fruits and vegetables, the aim of this paper is to recognize the evolution of their technical efficiency. Performance analysis in the economic field is rather controversial. Following Parkan (2002) it is possible to classify three main approaches to measure performance: index numbers; frontier methods, and the non-parametric approaches. In this paper, efficiency was evaluated applying the Data Envelopment Analysis (DEA) technique (Charnes et al., 1978; Banker et al. 1984) considering two separate frontiers. Through the AIDA database for Italian agricultural cooperatives and the SABI database for Spanish cooperatives, two different sets of 81 and 106 firms respectively belonging to the fruit and vegetable sector, were selected over a five-year period from 2001 to 2005. The analysis of DEA’s results underlines the higher ability of Italian cooperatives to calibrate and optimize the inputs, to maximize the results (technical efficiency) as well as the ability of Spanish cooperatives to exploit scale economies. Over the period taken into consideration the average value of global technical efficiency decreases for Spanish as well as Italian cooperatives. In the case of Spanish cooperatives this situation is due to the loss of ability to calibrate and optimize the inputs, even if the considered firms reveal ability to develop scale economies. In the case of Italian cooperatives the results reveal the substantial firms’ technical efficiency, even if scale inefficiency undermines the global efficiency.