Researchers analyzing Polish pig farms have found that membership in producer groups is associated with higher technical efficiency in pork production. The study, published in Agricultural and Food Economics, utilizes panel data from 2016 to 2023 to assess whether horizontal integration improves farm performance. The findings indicate that while open-cycle farms generally exhibit higher average efficiency, the specific benefits of producer group membership are most pronounced among farms operating within closed-cycle systems. This distinction highlights the complex relationship between production models and cooperative structures in the European pork sector.
The research addresses a significant decline in pork production across the European Union, with Poland experiencing one of the most pronounced drops in pig numbers since joining the EU in 2004. The total number of pigs in Poland fell from 17.40 million heads to 9.62 million in 2022, a decrease of 44.71%. This downward trend has transformed Poland from a major exporter of live pigs into a net importer, despite the country possessing favorable conditions for pig farming. Strategies to enhance the efficiency of pig fattening operations are therefore critical to counteracting this sectoral decline.
To investigate the role of integration, the study applied a true random effects stochastic frontier model combined with Augmented Inverse Probability Weighting. The dataset comprised over 7,000 observations from the Farm Accountancy Data Network, focusing on farms specialized in pig production or mixed farms with a substantial swine component. The authors categorized these farms into two primary production types: open-cycle farms that purchase piglets externally, and closed-cycle farms that rear sows and produce piglets internally for subsequent fattening. This differentiation allows for a precise examination of how integration affects efficiency across different operational complexities.
The stochastic frontier analysis revealed that producer group membership is associated with lower dispersion of the inefficiency component in the production function. Under the half-normal distribution assumption used in the model, lower dispersion of inefficiency corresponds to lower expected inefficiency and higher expected technical efficiency. This association was statistically significant primarily for farms operating in the closed-cycle system, whereas no comparable effect was observed for open-cycle farms. The results suggest that the benefits of integration are context-dependent and closely tied to the specific production system employed by the farm.
The Augmented Inverse Probability Weighting estimates provided a more direct measure of the association between group membership and efficiency scores. Conditional on observed covariates, producer group membership was associated with a 2.2 percentage point higher technical efficiency score. Although this numerical difference may appear modest, it represents over 18% of the average efficiency gap in the sample. The average efficiency score was approximately 0.88, meaning the average distance from the production frontier was about 12 percentage points. The 2.2-point improvement thus constitutes a substantial portion of the potential performance deficit.
To provide a tangible interpretation of this efficiency gain, the authors translated the statistical difference into an output-equivalent measure. The average annual production of finishers in the sample was 61,068 kilograms. A 2.2 percentage point increase in the efficiency score corresponds to approximately 1,500 kilograms of additional finisher output per farm per year. Assuming an average live weight of 120 kilograms per finisher, this equates to about 13 additional animals. This illustrative calculation underscores the practical significance of the efficiency gains associated with producer group participation, although it does not account for the full costs of participation.
The study also examined the determinants of producer group participation, revealing that older and less-educated farmers are less likely to join such groups. Each additional year of age was associated with a 1.4% lower odds of joining, while farmers with low education had 51.3% lower odds of participation. Conversely, farms that utilize more external labor are more likely to join producer groups. The odds of participation were also significantly higher for larger farms and those located in specific regions of Poland, with farms in Region D having 3.5 times higher odds of joining compared to the reference Region A. These findings highlight the demographic and structural factors that influence the adoption of cooperative practices.
Open-cycle farms, which source piglets externally, demonstrated higher average estimated efficiency scores compared to closed-cycle farms. The mean efficiency score for open-cycle farms was 0.944, whereas for closed-cycle farms it was 0.868. This difference is consistent with the greater complexity and higher capital requirements associated with closed-cycle systems, which involve reproduction, sow management, and piglet rearing. However, the positive association between producer group membership and efficiency was evident mainly among these closed-cycle farms. This suggests that integration helps mitigate the challenges inherent in more complex production systems by facilitating knowledge transfer and capacity building.
The authors note that purchasing feed externally was associated with higher efficiency levels, as specialized feed companies possess advanced manufacturing technologies and precision feeding capabilities. In contrast, farms producing their own feed exhibited lower estimated efficiency, possibly due to the diversion of resources to ancillary activities. The study also identified technological progress as a key driver of performance, with an estimated annual growth rate of 2.5% in the main model. Increasing returns to scale were observed across all model specifications, indicating that larger farms benefit from economies of scale in pig production.
Limitations of the study include the relatively low proportion of pig farms participating in producer groups, which is concentrated in a few regions of Poland. This low prevalence poses challenges for quantitative analysis and limits the statistical power of selectivity corrections. Additionally, the study relies on the assumption of selection on observables, meaning that unobserved factors correlated with group membership and efficiency could bias the results. The authors therefore interpret their findings as associations rather than definitive causal effects. Future research could extend this analysis using meta-frontier models or qualitative methods to better understand the motivations behind farmers’ decisions to join producer groups.
The findings have implications for agricultural policy, suggesting that support schemes for producer groups should focus on long-term sustainability rather than short-term financial incentives. The current support system under the Common Agricultural Policy may be insufficient to ensure the viability of groups after the mandatory support period expires. Policymakers are encouraged to promote cooperative practices, empower local leadership, and strengthen agricultural advisory services to support group formation. By fostering trust and demonstrating the sustainable benefits of collaboration, the sector can better leverage the efficiency gains associated with horizontal integration.
The study contributes to the literature by providing the first large-scale examination of the relationship between producer group membership and technical efficiency among pig farms in Central and Eastern Europe. It proposes a robust analytical framework that differentiates between open and closed production systems, allowing for a nuanced understanding of how integration processes affect farm performance. The use of detailed, unpublished data from the Farm Accountancy Data Network enables a precise assessment of efficiency differences across farms, highlighting the importance of production system type in determining the benefits of cooperative structures in the pork sector.
Subject of Research: Horizontal integration, production systems and technical efficiency in pork production: evidence from Polish pig farms
Article Title: Horizontal integration, production systems and technical efficiency in pork production: evidence from Polish pig farms
Article References: Kryszak, Ł., Staniszewski, J., & Smędzik-Ambroży, K. (2026). Horizontal integration, production systems and technical efficiency in pork production: evidence from Polish pig farms. Agricultural and Food Economics, 14(1), Article 59. https://doi.org/10.1186/s40100-026-00502-w
Image Credits: AI Generated
DOI: 10.1186/s40100-026-00502-w
Keywords: Horizontal, integration, production, systems, technical, efficiency, pork, evidence, Polish, farms, scientific research
News Source: Alan Morgan. (November 7, 2026). Polish Pig Farm Study Links Producer Groups to Higher Efficiency. Scienmag.
