Developing a Social Perspective to Farm Performance Analysis

This paper examines how traditional farm productivity analysis can be extended to produce a performance measure from the perspective of society. A biophysical model is used to measure inputs from the environment which are combined with conventional marketed inputs to develop an environmentally sensitive Malmquist productivity index to determine social productivity growth. The analysis is applied to data collected from selected farms in South-East Australia and includes a measure of leaching and run-off as a proxy measure of the impact the application of fertilizers has on ground and surface water. The results show measured productivity growth differs when environmental factors are considered.