Are Italian farms achieving water-use efficiency in agriculture? Meta-frontier DEA analysis of efficiency gaps and farm-level disparities

An analysis of irrigation efficiency in Italy is essential to manage increasing water scarcity while sustaining agricultural productivity and informing targeted policy interventions. Using Farm Accountancy Data Network (FADN) data for 2018–2023 (700 farms across seven types of farming), we implement a two-step DEA framework (DEA–Tobit) with meta-frontier decomposition to estimate water-use efficiency (WUE), implied water-saving potentials, and technology gaps, and to examine farm- and context-specific determinants of WUE. Results indicate low average WUE and substantial heterogeneity across types of farming: horticulture shows the highest efficiency, whereas grazing livestock and mixed crop–livestock farms perform worst. Meta-frontier results reveal that inefficiencies reflect both technological shortfalls and managerial inefficiencies, with permanent crops exhibiting the largest technology gap. Tobit estimates suggest that higher water prices and micro-irrigation adoption are positively associated with WUE, while smaller economic scale and southern location correlate negatively. Overall, the findings support policy mixes combining demand-side instruments (e.g., volumetric pricing) with targeted technology diffusion and capacity building—particularly in water-stressed southern areas—and provide empirically grounded benchmarks for future modelling, scenario analysis, and policy design to improve agricultural water productivity.