Resource use efficiency under self‐selectivity: the case of Bangladeshi rice producers

The paper jointly evaluates the determinants of switching to modern rice and its productivity while allowing for production inefficiency at the level of individual producers. Model diagnostics reveal that serious selection bias exists, justifying the use of a sample selection framework in stochastic frontier models. Results revealed that modern variety selection decisions are influenced positively by the availability of irrigation and gross return from rice and negatively by a rise in the relative wage of labour. Adoption of modern rice is higher in underdeveloped regions. Seasonality and geography/location does matter in adoption decisions. Stochastic production frontier results reveal that land, labour and irrigation are the significant determinants of modern rice productivity. Decreasing returns to scale prevail in modern rice production. The mean level of technical efficiency (MTE) is estimated at 0.82. Results also demonstrate that the conventional stochastic frontier model significantly overestimates inefficiency by three points (MTE = 0.79). Policy implications include measures to increase access to irrigation, tenurial reform and keeping rice prices high to boost farm returns and offset the impact of a rise in the labour wage which will synergistically increase the adoption of modern rice as well as farm productivity.     

Production Efficiency of Jasmine Rice Producers in Northern and North‐eastern Thailand

The paper jointly evaluates the determinants of switching to Jasmine rice and its productivity while allowing for production inefficiency at the level of individual producers. Model diagnostics reveal that serious selection bias exists, justifying use of a sample selection framework in stochastic frontier models. Results from the probit variety selection equation reveal that gross return (mainly powered by significantly higher Jasmine rice price), access to irrigation and education are the important determinants of choosing Jasmine rice. Results from the stochastic production frontier reveal that land, irrigation and fertilisers are the significant determinants of Jasmine rice productivity. Significantly lower productivity in Phitsanulok and Tung Gula Rong Hai provinces demonstrate the influence of biophysical and environmental factors on productivity performance. The mean level of technical efficiency is estimated at 0.63 suggesting that 59% [(100 ? 63)/63] of the productivity is lost due to technical inefficiency. Policy implications include measures to keep Jasmine rice price high, increase access to irrigation and fertiliser availability, as well as investment in education targeted to farm households which will synergistically increase adoption of Jasmine rice as well as farm productivity.     

Land Tenure,Tenure Security and Farm Efficiency: Panel Evidence from the Philippines

This article tests the relationships among formalised property rights, land tenure contracts and productive efficiency in farming. Using four rounds of panel data from 230 rice farms in the Philippines, we measure the effects of land tenure arrangements on farm efficiency using a stochastic production frontier model. We test for the allocative efficiency of observed land rental markets. We also test how land tenure security affects farmers' investment decisions. Results suggest that, despite the presence of formalised titles, the rental market remains inefficient at allocating land. In contrast, the unformalised tenure contracts used by farmers appear to provide tenure security.     

Efficiency and technical progress in traditional and modern agriculture: evidence from rice production in China

Productive efficiency for Chinese hybrid and conventional rice production is estimated using a dual stochastic frontier efficiency decomposition model. Results reveal significant differences in technical and allocative efficiency between conventional and hybrid rice production, and indicate significant regional efficiency differences in hybrid rice production, but not in conventional rice production.     

Tenure Security and Farm Efficiency Analysis Correcting for Biases from Observed and Unobserved Variables: Evidence from Benin

We analyse the impact of land tenure security on the technical efficiency of a sample of smallholder farmers in Benin, based on an output‐oriented stochastic distance function. We use propensity score matching to correct for selection bias from observed variables. The Greene ( 2010 ) sample selection model is used to correct for selection bias due to unobserved variables. We estimate meta‐frontiers to analyse agricultural productivity and efficiency differences between landowners and non‐owners. Our results show that non‐owners have consistently higher levels of technical efficiency and productivity.     

The Effects of Direct Payments on Technical Efficiency of Irish Beef Farms: A Stochastic Frontier Analysis

The 2003 Mid‐Term Review of the CAP sought to refocus the EU's farm support policy to foster a more competitive and market‐orientated agricultural sector. The foundation of this reform comprised the introduction of decoupled payments to farmers, replacing the EU's previous system of supports that were directly linked to production of designated crops and livestock. This paper explores the effect of coupled payments and their subsequent replacement by decoupled support, on the technical efficiency of specialist beef farms in Ireland. Given the high reliance of beef farmers in Ireland on CAP payments, the decoupling of payments has been especially important for the sector. A stochastic production frontier is estimated using a panel dataset comprising detailed accountancy data for Irish beef farms between the years 2000 and 2013. Our results indicate that technical efficiency in the beef farming sector has been consistently poor, with an average efficiency score of only 0.53 during the period analysed. However, we found that direct income received in the form of coupled payments had a positive impact on farm efficiency, and that this positive effect was maintained after their replacement with decoupled income support.     

Technology choice and efficiency on Australian dairy farms*

Deregulation of the Australian dairy industry, specifically the removal of price subsidies to ‘market milk’, as well as ongoing drought in many dairy regions, has placed considerable pressure on farm cash income and a search for ways in which dairy farms can be made to operate more efficiently. Using traditional farm survey data and a unique biannual data set on farm technology use, this paper estimates a stochastic production frontier and technical efficiency model for dairy farms in New South Wales and Victoria, determining the relative importance of each input in dairy production, the effects of key technology variables on farm efficiency, and overall farm profiles based on the efficiency rankings of dairy producers. Results show that production exhibits constant returns to scale and although feed concentration and the number of cows milked at peak season matter, the key determinants of differences in dairy farm efficiency are the type of dairy shed used and the proportion of irrigated farm area. Overall farm profiles indicate that those in the ‘high efficiency group’ largely employ either rotary or swing‐over dairy shed technology and have almost three times the proportional amount of land under irrigation.     

Socioeconomic aspects of rice‐fish farming in Bangladesh: opportunities,challenges and production efficiency*

In spite of the potential for rice‐fish farming in Bangladesh, it has been adopted by relatively few farmers because of socioeconomic, environmental, technological and institutional constraints. Rice monoculture remains the main farming system in Bangladesh even though integrated rice‐fish farming is the best farming system in terms of resource utilisation, diversity, productivity, production efficiency and food supply. Only a small number of farmers involve in integrated rice‐fish farming. This study concludes that rice‐fish farming is as production efficient as rice monoculture and that integrated performs better in terms of cost and technical efficiency compared with alternate rice‐fish farming. Integrated rice‐fish farming can help Bangladesh keep pace with the current demand for food through rice and fish production. However, a lack of technical knowledge of farmers, high production costs and risks associated with flood and drought are inhibiting more widespread adoption of the practice.     

Productivity improvement in Korean rice farming: parametric and non‐parametric analysis†

The published empirical literature on frontier production functions is dominated by two broadly defined estimation approaches – parametric and non‐parametric. Using panel data on Korean rice production, parametric and non‐parametric production frontiers are estimated and compared with estimated productivity. The non‐parametric approach employs two alternative measures based on the Malmquist index and the Luenberger indicator, while the parametric approach is closely related to the time‐variant efficiency model. Productivity measures differ considerably between these approaches. It is discovered that measures of efficiency change are more sensitive to the choice of the model than are measures of technical change. Both approaches reveal that the main sources of growth in Korean rice farming have been technical change and productivity improvements in regions of the country that have been associated with low efficiency.     

Off‐farm work,technical efficiency,and rice production risk in Taiwan

This article investigates the differences in yield production, production efficiency, and yield risk for farmers both with and without off‐farm work. Using a nationwide survey of rice farmers in Taiwan, we estimate two stochastic production frontier models that accommodate technical inefficiency and production risk simultaneously for farmers both with and without off‐farm work. The stochastic dominance criterion is then applied to compare the differences in the distributions of the estimated technical efficiency and yield risk between groups. The empirical results indicate that these two groups of farmers use resources in different ways, and off‐farm work is not necessarily associated with lower technical efficiency. For farmers in the lower percentiles of the efficiency distribution, those with off‐farm work are more efficient than their counterparts without off‐farm work. In addition, farmers with off‐farm work face higher production risk and this result is robust for the entire distribution.     

Sawmill production in the interior of British Columbia: A stochastic ray frontier approach

We examined the productive efficiency of the interior sawmilling industry in British Columbia using stochastic frontier analysis. Prior sawmilling studies using this method have neglected the multi-output nature of sawmills. To accommodate both lumber and chips as outputs, we used a ray production function and adopted it into the stochastic frontier framework. A translog functional form was specified with three inputs (i.e., capital, labour, and roundwood) and applied to five years (2003–2007) of mill specific production data. The ray production function is flexible allowing factor productivity to vary with the output mix. Results indicated the presence of both economies of scale and technical inefficiency. This suggested that a long-run equilibrium had not yet been reached during this time and might explain recent restructuring occurring in this region.     

中国大宗淡水鱼养殖户技术效率、TFP增长及分解——基于25个省份微观调查数据

本文基于2011—2017年养殖户的微观调查数据,利用超越对数的随机前沿生产函数实证分析了大宗淡水鱼养殖户的技术效率、TFP增长及其分解。研究发现,(1)大宗淡水鱼养殖户的技术效率为0.827,表明养殖户的技术利用水平还存在较大的改进空间;(2)不同养殖规模对养殖户技术效率影响不显著,但专业化养殖对技术效率具有显著的正向影响;(3)养殖户TFP年均增长率为3.29%,且呈持续增长趋势;(4)养殖户TFP增长主要来源于技术进步,但技术效率的下降阻碍了TFP的增长;(5)技术效率和TFP增长都具有明显的区域性特征,总体表现为从西部到东部递减的趋势。     

Annual and cropping season environmental production conditions effects on smallholder technical efficiency in sub‐Saharan Africa: Evidence from Ethiopia

This article investigates the impact of environmental production conditions on smallholder farmers’ technical efficiency in Ethiopia for wheat, maize, and sorghum farming. We use a household panel data set with annual and cropping season environmental production conditions to estimate the technical efficiency scores. The results show that including environmental production conditions in the stochastic frontier has a significant impact on farmers’ technical efficiency scores. Technical efficiency scores improve when environmental production conditions are incorporated in the stochastic frontier. Thus, accounting for environmental production conditions reduces the inefficiencies that otherwise may be attributed to the characteristics of smallholder farmers.     

Factors Affecting Technical Efficiency of Rice Farmers in Village Reservoir Irrigation Systems of Sri Lanka

Given the importance of water for rice production, this study examines the factors affecting the technical efficiency (TE) of irrigated rice farmers in village irrigation systems (VIS) in Sri Lanka. Primary data were collected from 460 rice farmers in the Kurunagala District, Sri Lanka, to estimate a stochastic translog production frontier for rice production. The mean TE of rice farming in village irrigation was found to be 0.72, although 63% of rice farmers exceeded this average. The most influential factors of TE are membership of Farmer Organisations (FOs) and the participatory rate in collective actions organised by FOs. The results suggest that enhancement of co‐operative arrangements of farmers by strengthening the membership of FOs is considered important for increasing TE in rice farming in VIS.     

Impact of land fragmentation and resource ownership on productivity and efficiency: The case of rice producers in Bangladesh

The paper analyzes the impact of land fragmentation and ownership of resources on productivity and technical efficiency in rice production in Bangladesh using farm level survey data. Results reveal that land fragmentation has a significant detrimental effect on productivity and efficiency as expected. The elasticity estimates of land fragmentation reveal that a 1% increase in land fragmentation reduces rice output by 0.05% and efficiency by 0.03%. On the other hand, ownership of key resources (land, family labour, and draft animals) significantly increases efficiency. The mean elasticity estimates reveal that a 1% increase in family labour and owned draft animal improve technical efficiency by 0.04% and 0.03%, respectively. Also, a 1% increase in the adoption of modern technology improves efficiency by 0.04%. The mean technical efficiency in rice production is estimated at 0.91 indicating little scope to improve rice production per se using existing varieties. Policy implications include addressing structural causes of land fragmentation (e.g., law of inheritance and political economy of agrarian structure), building of physical capital (e.g., land and livestock resources), improvements in extension services and adoption of modern rice technology.     

Farms’ technical inefficiencies in the presence of government programs*

We focus on determining the impacts of government programs on farms’ technical inefficiency levels. We use Kumbhakar's stochastic frontier model that accounts for both production risks and risk preferences. Our theoretical framework shows that decoupled government transfers are likely to increase (decrease) DARA (IARA) farmers’ production inefficiencies if variable inputs are risk decreasing. However, the impacts of decoupled payments cannot be anticipated if variable inputs are risk increasing. We use farm‐level data collected in Kansas to illustrate the model.     

Does individualization help productivity of transition agriculture?

There are large differences across transition countries with respect to agricultural‐sector performance and corresponding scope of farm restructuring and shift to individual farming. In this article we analyze the impact of individualization on productivity growth within an augmented neoclassical growth model framework. This approach allows us to circumvent criticisms on the grounds of lack of theoretical and objective criteria for inclusion of explanatory variables. Furthermore, in the empirical analysis using a panel data covering 15 transition countries over the period 1990–2001 and applying a generalized method of moments with instrumental variable estimator we are able to control for the impact of various factors and the potential endogeneity of variables. Our estimation results are robust and support the view that the shift to individual farming, as well as the overall economic reforms, has positively contributed to the productivity growth in agriculture during the first decade of transition.     

Production Risk and Technical Efficiency in Organic and Conventional Agriculture – The Case of Arable Farms in Germany

This paper quantifies the importance of production risk and technical efficiency as two possible sources of production variability in German organic and conventional farming. Determinants of production risk and inefficiency are investigated based on a combination of Just and Pope’s stochastic production framework and a Stochastic Frontier Analysis. The empirical analysis is conducted using a balanced panel of farm records from 1999/2000 to 2006/2007 on 37 organic and conventional arable farms, respectively. Euclidian‐Distance‐Matching is used to identify for each organic farm a conventional counterpart with similar structural features. Results indicate that output variability in both production technologies is mainly caused by production risk. Land and labour are identified as risk‐increasing inputs in both farm types whereas higher capital endowment, seed costs and soil quality have risk‐reducing effects.