FARM SIZE AND TECHNICAL EFFICIENCY OF THE AGRICULTURAL SECTOR IN THE EUROPEAN UNION (EU-27).

The majority of studies of agricultural productivity support the view that there is a relationship between productivity and farm size. How the size of a farm is related to its efficiency is a constant problem in agricultural economics research. It also has important implications for agricultural development policy. For developed countries, including the countries of the European Union, numerous studies show that, with the increase in the size of farms, their efficiency usually increases. Moreover, there is a constant decrease in the number of farms and the concentration of land and labor. For this reason, the problem of the influence of the economic size of a farm is included in the scope of the research related to the analysis of the relationship between the farm size and its efficiency. The purpose of the paper was to investigate the relative technical efficiency of the agricultural sector in the European Union (EU-27) using the Data Envelopment Analysis (DEA). It was found that with the increase in economic size, the technical efficiency of the researched farms improved. Attention was paid to the possibility of reducing labor inputs, mainly in farms of economic size classes ES1-ES4. No need to reduce the level of capital expenditure has been demonstrated. This emphasizes the growing importance of the substitution of labor with capital. [ABSTRACT FROM AUTHOR]