Why some farms are more productive than others

“We found astonishing productivity differences, even between similar farms within the same country,” says Finger. “The most productive field-crop farms generate over 3.6 times more output per input unit compared to the least productive ones.” Weather and soil quality only explain part of this disparity. The strongest drivers are efficient management practices and scale effects. Farms with effective management consistently outperform their peers.

Productivity is not constant. The persistence of productivity – how consistently a farm remains productive – varies significantly by farm type. Mixed farms exhibit greater resilience to external shocks, such as extreme weather or economic fluctuations. In contrast, granivore farms – which specialise in pigs and poultry – show lower persistence, making them vulnerable to disruptions.

All farms can improve.

Understanding productivity persistence provides insights into long-term farm resilience. Wimmer points out a promising finding: “We do not see productivity lock-ins. Even less productive farms can become more productive over time.” Over the study period, persistence gradually increased. This suggests European agriculture has adapted despite growing pressure from climate change.

With their inherently high persistence, mixed farming systems offer insights into the benefits of diversification. Diversified farms are more stable over time, pointing to practical strategies that could mitigate risks associated with climate and market uncertainties.

Implications from soil management to sector resilience

The study highlights that focused policy measures can boost resilience. “Investments in healthy soils, in technology tailored to specific farms, and measures towards better management practices can substantially narrow the productivity gap and improve resistance against external shocks,” says Wimmer.

Addressing productivity disparities could also strengthen the entire agricultural sector. Less productive farms, supported through targeted investment, advisory services, and networks, could substantially improve their output, reducing inequalities and raising overall sector resilience.

Recognition of productivity variations and their underlying factors offers powerful leverage for sustainable agricultural development in academia and practice. It also opens up new avenues for future research inquiries: How does farm-level digitalisation impact productivity and stability? Can holistic resilience assessments, including household income, provide clearer pictures for policy? Finger sees great potential in exploring these areas: “Digitalisation offers exciting opportunities. The next frontier is understanding how farms can effectively harness digital tools to improve productivity and stability.”

“Our findings offer a strategic perspective,” concludes Finger. “By addressing management practices, supporting diversification, and wisely investing in farm-specific technologies, Europe can significantly boost agricultural productivity and resilience.”