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The main aim of this study is to examine the relative efficiency of agriculture in the European Union using Data Envelopment Analysis for the period 20052015. We have examined the relative efficiency using non-radial and non-oriented slacks-based model (SBM) under the assumption of a variable return to scale. We have looked for causes of inefficiency and have come up with the recommendations how to change input and output variable to reach the efficiency frontier. The results show that, on average, the European Union agricultural sector has been performing efficiently, and its development could be considered as stable. After taking into account the size of the economies in form of gross domestic product in market prices, we can say, that the efficiency was positively affected mainly by the development in large countries. By examining the optimal values for the variables used in the SBM model, it has been found that on average for the movement on the efficiency frontier it is necessary to reduce both inputs (labour and utilised agricultural area) and simultaneously increase both outputs (animal and crop production).

A slack-based measure of agricultural efficiency in the European Union countries