Analysis of determinants of efficiency in grape farming – the case of Kosovo

This study analyses the performance of vineyards in Kosovo in terms of their technical, allocative, and economic efficiency. It uses two methods to measure efficiency: Data Envelopment Analysis (DEA) and Tobit regression. The data comes from a survey of 165 wine producers through face-to-face interviews in three regions of Kosovo – Rahovec, Suharake and Prizren – between the years 2016 and 2018, each yielding the average of inputs, outputs and prices for the three years. In order to determine the key variables for grape growing efficiency, it was necessary to consider the combined effects of the interactions between inputs, as this has an impact on overall final production. The results show great potential for improving the efficiency of viticulture. The average technical efficiency (TE) is 0.68, the average allocative efficiency (AE) is 0.77 and the average economic efficiency (EE) is 0.52. In general, TE, AE and EE were influenced by the selected variables, suggesting that the selected variables played quite an important role in enabling farmers not to use too many inputs in the production of grapes and instead to use them in appropriate proportions. It also shows how grape growers can improve their productive
efficiency by adopting certain practices and identifying the key factors in their system.