DETERMINING TECHNICAL EFFICIENCY OF MANAGEMENT SYSTEM IN AGRIBUSINESS (AS EXEMPLIFIED BY MONGOLIAN HORSE-BREEDING)

Abstract

The paper considers a possibility of increasing the efficiency of agricultural production by optimizing the parameters of economic activity and using internal reserves of agricultural enterprises. This methodology based on the theory of V. Pareto has been tested using the case study for 2013-2015 in the Battsangal summon of the Arkhangai aimag of Mongolia among 123 farms engaged in horse-breeding. Basing on the indicators of income amount and production costs, the authors have stimated the efficiency. The efficiency model has been made using the standard program DEAP 2.0. According to the assessment of technical efficiency focused on minimizing resource costs with variable effect of economy of scale, it has been assumed that 60.2% of farms can improve their performance by reducing input costs. Basing on the calculation results of technical efficiency aimed at maximizing output, the share of "reference" farms with a variable scale effect has accounted for 19.5%. Studies have shown that 80.5% of farms can improve their performance by increasing the amount of gross revenue at the same amount of input costs. It has been established that livestock farms in Mongolia possess significant reserves to improve the efficiency of their operations by optimizing the technical parameters of economic activity. It can be concluded that the use of mechanization tools for labor-intensive processes will significantly increase production and improve the efficiency of horse-breeding.