Can a pursuit of productivity be reconciled with sustainable practices in small-scale farming? Evidence from central and eastern Europe

Small farms constitute the vast majority of agricultural holdings in the world. Therefore, there are the questions of how the small farm sector should evolve and whether economic and environmental goals can be pursued simultaneously. The main objective of this article is to identify potential improvements (a non-radial inefficiency slack) in small farms in Central and Eastern Europe with different types of farming under an environmentally adjusted production function. Based on this, potential development pathways for small farms are assumed. A hybrid data envelopment analysis meta-frontier super-efficiency model with environmental proxies reflecting biodiversity (i.e. crops diversity, grassland, orchards, vineyards) and undesirable outputs (such as soil organic matter loss and GHG sources) and an uncontrollable policy input is used on a country-representative sample of 2320 small farms in four countries: Poland, Romania, Serbia, and Moldova. We found that the more technically efficient small farms are also usually more sustainable when socially desirable criteria were considered. Crops small farms can evolve in two directions: "landscape guardians" and "artisanal (traditional) framers." Livestock farms could either maintain the status quo or choose an exit pathway. Mixed farms are likely to become land-scape guardians, while a sustainable intensification path is open for 20% of farms that specialize in permanent crops.