Developing a social perspective to farm performance analysis

This paper examines how traditional farm productivity analysis can be extended to produce a performance measure from the perspective of society. A biophysical model is used to measure inputs from the environment which are combined with conventional marketed inputs to develop an environmentally sensitive Malmquist productivity index to determine social productivity growth. Data Envelopment Analysis (DEA) is used to analyze data collected from selected farms in South-East Australia and includes a measure of leaching and run-off as a proxy measure of the impact the application of fertilizers has on ground and surface water. The results show measured productivity growth increases for some farms and decreases for others when environmental factors are considered.