Studies in the measurement of farm efficiency : A thesis submitted in partial fulfilment of the requirements for the Degree of Master of Agricultural Science with Honours in Lincoln College of the University of Canterbury

The formal use of farming standards in the organisation of agricultural advisory work dates from about twelve years ago, when arrangements were made for closer liaison between the Provincial Agricultural Service and the National Agricultural Advisory Service in the United Kingdom. Since that time a large volume of data has been collected in the United Kingdom and, to a lesser extent, in New Zealand. The standards derived from the data are used in a semi-formal analysis of management problems at the individual farm level. This process, the farm business method of comparative analysis is at present being developed in New Zealand by the Department of Agriculture's Economic section. Candler and Sargent (1962) have pointed out that 'the development of farm standards as a research technique has been characterised by a complete lack of theoretical underpinning". They presented an elementary theoretical analysis of the resource allocation problem applied to farming, and concluded that the publication and use of simple factor/product relationships as guides to better farming was not satisfactory. This was especially true in times of rapid technological and price change. They further argued that changing price relationships may place an individual farm in say the top ten per cent of a specific group of farms in one period, but exclude it in another period. This is a result more of the characteristic inflexibility of farm organisation, rather than of an inability of the farm standards approach to cause movement along the production possibilities curve. Their criticisms of the approach are nevertheless, correct, as presented. But as Blagburn (1962) has pointed out in a rejoinder, the theoretical deficiencies of the approach do not necessarily make the farn standards approach invalid. Certainly, there is a "technologist's dilemma"; but advice from a professional adviser which required that output per stock, or land unit be maximised would be unacceptable to the farmer if he could see no obvious increase in profit, in leisure time, or in ease of management as a result. The studies in this thesis originated from the desire of the Department of Agriculture to test the validity of criticisms such as those of Candler and Sargent.