Production economics forms a very important part of an enormous range of economic theory. Agricultural production is no exception. When evaluating the competitiveness of the multifunctional agriculture, it is necessary to use the measure of efficiency instead of productivity. The conception of the efficiency is explained and the methods for measurement are provided. The authors discuss the methods of Stochastic Frontier Approach (SFA), Free Disposal Hull (FDH) and Data Envelopment Analysis (DEA) that are particularly useful for multi-criterial evaluation of multifunctional processes. Those methods assign an efficiency score to each Decision Making Unit (DMU) based on how well it transforms a given set of inputs into outputs. Most studies have only focused on application of DEA method for assessment of the efficiency of agriculture farms. There is still a need on applications for sectors. This paper provides an examination of the applicability of DEA method to agriculture sectors efficiency measurement. By applying mathematical models, which are based on the DEA, the efficiency of agriculture in each EU country was evaluated.

Production economics forms a very important part of an enormous range of economic theory. Agricultural production is no exception. When evaluating the competitiveness of the multifunctional agriculture, it is necessary to use the measure of efficiency instead of productivity. The conception of the efficiency is explained and the methods for measurement are provided. The authors discuss the methods of Stochastic Frontier Approach (SFA), Free Disposal Hull (FDH) and Data Envelopment Analysis (DEA) that are particularly useful for multi-criterial evaluation of multifunctional processes. Those methods assign an efficiency score to each Decision Making Unit (DMU) based on how well it transforms a given set of inputs into outputs. Most studies have only focused on application of DEA method for assesment of the efficiency of agriculture farms. There is still a need on applications for sectors. This paper provides an examination of the applicability of DEA method to agriculture sectors efficiency measurement. By applying mathematical models, which are based on the DEA, the efficiency of agriculture in each EU country was evaluated.

The article presents results of the analysis of the cattle breeding industry’s development in Ukraine, the main trend of which was the decrease in the number of cattle, including the number of cows. A way to support livestock in the industry using the subsidy mechanism is suggested. This approach is aimed at increasing profitability of the cattle breeding industry output per 1 ha of fodder crops in the farm to profitability of barley production from 1 hectare in the area. The results of the proposed approach show that increasing milk profitability from 1 hectare of fodder crops to barley profitability from 1 hectare can be the basis for maintaining the livestock sector. The use of the livestock productivity factor (cow milk yield) in the proposed methodology makes farms more interested in increasing livestock productivity, which in turn increases the number of subsidies in the industry. In addition, an increase in fodder crops area in the farm has an ecological effect.

The article presents results of the analysis of the cattle breeding industry’s development in Ukraine, the main trend of which was the decrease in the number of cattle, including the number of cows. A way to support livestock in the industry using the subsidy mechanism is suggested. This approach is aimed at increasing profitability of the cattle breeding industry output per 1 ha of fodder crops in the farm to profitability of barley production from 1 hectare in the area. The results of the proposed approach show that increasing milk profitability from 1 hectare of fodder crops to barley profitability from 1 hectare can be the basis for maintaining the livestock sector. The use of the livestock productivity factor (cow milk yield) in the proposed methodology makes farms more interested in increasing livestock productivity, which in turn increases the number of subsidies in the industry. In addition, an increase in fodder crops area in the farm has an ecological effect.