BETTER MANAGEMENT CAN IMPROVE THE EFFICIENCY OF INDIRECT ENERGY - Economics of Sustainable Energy in Agriculture - page 10

production, synthetic pesticides and fertilisers are responsible for most of
the total consumption of indirect energy (Clements et al. 1995). Earlier
research (De Koeijer et al. 2001) showed that the Dutch arable farmers
differ significantly in efficiency of fertiliser and pesticide application.
Moreover, the differences in efficiency among farmers were found to
persist within years (over fields) and also between years. As physical
conditions could be assumed to be fairly similar for all farmers in the data
set analysed it was concluded that differences in efficiency must be mainly
the result of differences in farm management. The central issue examined
in this chapter is whether differences in the efficiency of indirect energy
use could be explained by differences in farm management. With this
insight, keys could be found to improve management in order to reduce the
use of indirect energy.
Management is often mentioned as an important factor in
explaining efficiency but little has been done to actually analyse the
relation between management and the efficiency realised. The efficiency
literature often explains the relation between management and technical
and/or economic performance by personal aspects such as 'level of
education' and 'experience or age' (for an overview see Rougoor et al.
1998: 266). These aspects are relatively easy to measure but cover only a
small part of the total management concept. Recently, methods from
experimental economics have been put forward as offering possibilities for
analysing the behaviour of decision-makers. Experimental economics is a
means to benefit from the strength of field experiments (such as control of
intervening variables) and to overcome some of their practical limitations
(such as high money and labour requirements) (Verstegen et al. 1998). An
off-farm economics experiment seems to be particularly appropriate for
effective analysis of all aspects of management capacity in terms of
technical performance.
The reduction of technical inefficiencies has always attracted
interest because of its financial benefits, given the environmental
arguments to reduce emissions and waste, but it is now an even more
attractive option. Insight into the relation between technical efficiency and
sustainability is needed in order to know whether improving the technical
efficiency is a relevant factor for improving sustainability. Quantification
of the technical and sustainable inefficiencies allows a given firm's
performance to be studied by comparing it with other firms (Tyteca 1997).
Only recently has the measurement of environmental efficiency received
attention in de literature. Tyteca (1996; 1997) presents an overview of the
studies in this field. Also recently, several studies have been published on
environmental efficiency in agriculture (see e.g. Fernandez-Cornejo 1994;
Piot-Lepetit et al. 1997; Reinhard et al. 1999). These efficiency studies