By Shelley Wright, Scotland correspondent

SMALLER is definitely not better when it comes to efficiency and competitiveness in Scottish agriculture, according to a new study.

Analysis by Lloyds TSB Scotland shows “substantial evidence” that the same output of Scottish agriculture could be produced from significantly fewer Scottish farm businesses.

This could be achieved through more efficient use of inputs and more competitive farm businesses that can compete on an EU and world market stage.

Using figures from the Scottish Executive, averaged over four years to eliminate seasonality, the report shows that, for dairy farms, the ratio of outputs to inputs ranges from 68 for a small unit with 34 cows, through to 109 for a large-scale dairy farm milking 135 cows.

“This means that as dairy farms become larger, the same level of outputs are produced from less inputs,” the report says.

Similar trends were shown for all farm types in Scotland.

Policy makers have to achieve sufficient economies of scale and implement the restructuring needed by the industry. That is their challenge, says the report.