The Role of the Common Agricultural Policy in Enhancing Farm Income: A Dynamic Panel Analysis Accounting for Farm Size in Italy

As a multi-objective policy, the EU Common Agricultural Policy continues to secure significant income support for farmers as one of the nine specific objectives. We estimate the income transfer efficiency of a broad set of pivotal policy measures, focusing on the effects of farm structure on income transfer efficiency. We use dynamic modelling, based on a micro-data panel of Italian farms for the period 2008–2014, allowing for endogeneity, simultaneity bias, and omitted variables. In line with previous studies and economic expectations, we find that decoupled direct payments provide the highest contribution to agricultural incomes, followed by agri-environmental payments and on-farm investment subsidies. Coupled payments have no significant impacts on farmers’ income. Generally, for all analysed Common Agricultural Policy measures, large farms benefit from greater transfer efficiency levels compared with medium and small farms. These differences among instruments and across farms suggest that policy-participation costs may play a pivotal role, together with the economic structure of farms, in determining the income transfer efficiency of CAP policies.     

Farm size,relative efficiency and agrarian policy in Côte d'Ivoire: profit function analysis of rice farms

This paper examines the relative economic efficiency of small and large rice farms in Côte d'Ivoire using a profit function approach. No differences in the relative economic efficiency of small and large farms were found. This conclusion is robust under alternative model specifications. Agrarian reforms directed towards further concentration of landholding for large farms in Côte d'Ivoire cannot be justified based on economic efficiency. Results show that access to credit and use of modern rice varieties significantly increase profits. To improve technical efficiency of rice farms, an accelerated program to provide information, credit, improved seeds and other inputs is needed. When all the farms (i.e. large and small) are taken together, there is evidence of allocative inefficiency. Strategies are needed to remove such management related inefficiencies in rice production either through the development of a better market price information system or effective farmer-oriented technical training programs by rice extension workers.     

Accounting for the Gender Technology Gap Amongst Smallholder Rice Farmers in Northern Ghana

Narrowing the gender technology gap in agricultural production has become a critical policy issue in sub‐Saharan Africa. A better understanding of the gender technology gap is essential for policy formulation and programme planning to ensure equity in resource allocation, and household‐level food security in low and middle income countries, such as Ghana. We employ a metafrontier approach to analyse the differences in the efficiency of male and female farmers, recognising the endogeneity of some of the variables in the inefficiency effects model, in particular the credit constraints of the rice farmers under study. Our findings show that while the rice farms themselves are very similar, average yields for male managed farms tend to be significantly higher than female managed farms reflecting higher seeding and fertiliser application rates on male managed farms. However, there is no significant difference between the genders in either land used for rice or total output per farm household. We find some evidence that relative to the metafrontier, male managed farms are less efficient than female managed farms. The results further show gender technology gap amongst the smallholder rice farmers with females’ technology gap ratio being significantly greater than that of males, with females operating on a production frontier closer to the metafrontier. Policies that provide females more access to productive resources and other agricultural services could assist in the generation of relatively higher output.     

Spatial dependency and technical efficiency: an application of a Bayesian stochastic frontier model to irrigated and rainfed rice farmers in Bohol,Philippines

We investigated the role of spatial dependency in the technical efficiency estimates of rice farmers using panel data from the Central Visayan island of Bohol in the Philippines. Household‐level data were collected from irrigated and rainfed agro‐ecosystems. In each ecosystem, the geographical information on residential and farm‐plot neighborhood structures was recorded to compare household‐level spatial dependency among four types of neighborhoods. A Bayesian stochastic frontier approach that integrates spatial dependency was used to address the effects of neighborhood structures on farmers’ performance. Incorporating the spatial dimension into the neighborhood structures allowed for identification of the relationships between spatial dependency and technical efficiency through comparison with nonspatial models. The neighborhood structure at the residence and plot levels were defined with a spatial weight matrix where cut‐off distances ranged from 100 to 1,000 m. We found that spatial dependency exists at the residential and plot levels and is stronger for irrigated farms than rainfed farms. We also found that technical inefficiency levels decrease as spatial effects are more taken into account. Because the spatial effects increase with a shorter network distance, the decreasing technical inefficiency implies that the unobserved inefficiencies can be explained better by considering small networks of relatively close farmers over large networks of distant farmers.     

Relative efficiency of women as farm managers: Profit function analysis in Côte d'Ivoire

The efficiency of women farmers in the agricultural sector of developing countries is passionately debated. Very few studies have examined this issue in African agriculture. All previous studies were based on production functions, but have been criticised as suffering from simultaneous equation bias because the input levels are endogenous. The profit function method avoids these problems. No previous study has used the profit function method to lest for technical, allocative and economic efficiency differences between women and men farmers. The objective of this paper was to determine whether women rice farmers are less efficient than men rice farmers in Côte d'Ivoire using the restricted normalised profit function method. Our results show that the relative degree of efficiency of women is similar to that of men. The paper provides empirical support for efforts to eliminate bias against women farmers in African agriculture.     

Soil conservation and technical efficiency among hillside farmers in Central America: a switching regression model*

The main objective of this paper is to evaluate and analyse technical efficiency (TE) levels for hillside farmers under different levels of adoption of soil conservation in El Salvador and Honduras. A switching regression model is implemented to examine potential selectivity bias for high and low level adopters, and separate stochastic production frontiers, corrected for selectivity bias, are estimated for each group. The main results indicate that households with above-average adoption show statistically higher average TE than those with lower adoption. Households with higher adoption have smaller farms and display the highest partial output elasticity for land. Constraints in the land and credit markets are likely explanations for these differences. In addition, all estimated models show that TE has a positive and significant association with education and extension.     

Measuring the economic inefficiency of Nepalese rice farms using data envelopment analysis

A data envelopment analysis of a sample of 76 Nepalese rice farmers reveals average relative economic, allocative, technical, pure technical and scale inefficiencies as 34, 13, 24, 18 and 7 per cent, respectively. The significant variations in the level of inefficiency across sample farms are attributed to the variations in the 'use intensities' of resources such as seed, labour, fertilisers and mechanical power. In addition, a second stage Tobit regression shows the variation is also related to farm-specific attributes such as the farmers' level of risk attitude, the farm manager's gender, age, education and family labour endowment. Based on the empirical findings, policy implications and development strategies for improving efficiency of Nepalese rice farms are briefly discussed.     

Participation in contract farming and farm performance: Insights from cashew farmers in Ghana

The global demand for cashew nuts continues to increase steadily. However, many African countries face difficulties in marketing and adding value to the product. Using recent survey data of 391 cashew farmers in Ghana, this paper contributes to the growing evidence on the significance of contract farming (CF) in improving the welfare of rural households in developing countries. Specifically, the paper analyzes the factors that influence cashew farmers’ decisions to participate in CF, and the impact of participation on farmers’ performance. We employ a recently developed switching regression model with endogenous explanatory variables and endogenous switching to control for selection bias caused by observable and unobservable factors. The empirical results show that participation in CF significantly increases labor productivity and price margins, as well as cashew yields, and net revenues. A disaggregated analysis of the sample into farm size categories reveals that small‐sized cashew farms tend to benefit more through CF, compared to medium‐ and large‐sized farms.     

Small U.S. dairy farms: can they compete?

The U.S. dairy industry is undergoing rapid structural change, evolving from a structure including many small farmers in the Upper Midwest and Northeast to one that includes very large farms in new production regions. Small farms are struggling to retain competitiveness via improved management and low‐input systems. Using data from USDA's Agricultural Resource Management Survey, we determine the extent of U.S. conventional and pasture‐based milk production during 2003–2007, and estimate net returns, scale efficiency, and technical efficiency associated with the systems across different operation sizes. We compare the financial performance of small conventional and pasture‐based producers with one another and with large‐scale producers. A stochastic production frontier is used to analyze performance over the period for conventional and pasture technologies identified using a binomial logit model. Large conventional farms generally outperformed smaller farms using most economic measures—technical efficiency, various profitability measures, and returns to scale.     

Measuring pesticide overuse and its determinants: Evidence from Vietnamese rice and fruit farms

Pesticides have long been important for the development of agricultural production. However, improper use of pesticides may result in inefficiency with respect to farm profitability, in addition to external effects of pesticide use on environmental and human health. This paper employs a production function that explicitly accounts for the role of damage abatement inputs (i.e. pesticides) in the production process, to examine the optimal use of pesticides. It then investigates determinants of pesticide overuse versus underuse and the intensity of overuse. The empirical application uses data on Vietnamese rice and fruit farms drawn from the 2016 Vietnamese Household Living Standards Survey. Results show about 95% of farmers overused pesticides for both rice and fruit farming systems. The Mekong Delta, also known as the ‘Rice Bowl’ of Vietnam, has higher levels of overuse on rice farms than two other regions. Overuse intensity is lower for female and poorer rice farmers while intensity is higher for those with more income and more family members. For fruit farms, younger farmers or those with more family members were more likely to overuse versus underuse pesticides.     

Technical,Allocative, Cost and Scale Efficiencies in Bangladesh Rice Cultivation: A Non‐parametric Approach

Applying programming techniques to detailed data for 406 rice farms in 21 villages, for 1997, produces inefficiency measures, which differ substantially from the results of simple yield and unit cost measures. For the Boro (dry) season, mean technical efficiency was 69.4 per cent, allocative efficiency was 81.3 per cent, cost efficiency was 56.2 per cent and scale efficiency 94.9 per cent. The Aman (wet) season results are similar, but a few points lower. Allocative inefficiency is due to overuse of labour, suggesting population pressure, and of fertiliser, where recommended rates may warrant revision. Second‐stage regressions show that large families are more inefficient, whereas farmers with better access to input markets, and those who do less off‐farm work, tend to be more efficient. The information on the sources of inter‐farm performance differentials could be used by the extension agents to help inefficient farmers. There is little excuse for such sub‐optimal use of survey data, which are often collected at substantial costs.     

Examining the relationship between farm size and productive efficiency: a Bayesian directional distance function approach

Achieving sustainable food security and increased farm income will depend on how efficient production systems are in converting available inputs to produce outputs. Using data from Malawi, we estimate a Bayesian directional technology distance function to examine the relationship between farm size and technical efficiency. Our results support the existence of an inverse relationship between farm size and productive efficiency, where small farms are more efficient than large farms. On average, farms exhibit inefficiency levels of 60%, suggesting that productivity could be improved substantially. Improving productive efficiency and food security will require farms to operate in ways where the size of cultivated area is matched by nonland production inputs such as labor, fertilizer, and improved seeds. The results highlight the need for policies that could incentivize farmers to adopt productivity‐enhancing technologies and, where possible, to allocate excess land to lease markets.     

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.     

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.     

Are small‐scale rice farmers in eastern India really inefficient? Examining the effects of microtopography on technical efficiency estimates

The article analyzes how controlling for differences in land types (defined by position on a low‐scale toposequence) affects estimates of farm technical efficiency for rice farms in eastern India. Contrasting previous research, we find that farms are considerably more technically efficient when efficiency estimates are carried out at the plot level and control for plot characteristics rather than at the farm level without such controls. Estimates show farms cultivating modern varieties are technically efficient and plots planted with traditional varieties on less productive lands (upland and midupland) operate close to the production frontier. Significant technical inefficiency is found on more productive lands (medium and lowland plots) planted with traditional rice varieties. The finding that these smallholder rain‐fed rice farms are efficient cultivators on some plots contrasts with previous findings of farm‐level inefficiency (i.e., rejects overarching explanations linked to farm operator ignorance or lack of motivation) and suggests more complex explanations are required to address the inefficiency that is present.     

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.     

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.     

Will future land based food and fibre production be in family or corporate hands? An analysis of farm land ownership and governance considering farmer characteristics as choice drivers. The New Zealand case

Family farming in various guises has been the dominant ownership and governance system in primary production over recorded history. This outcome has been controlled by farmers and their families, possibly due to tradition, opportunities, personal characteristics, skill sets and the nature of primary production. Of these, it is hypothesised that the farmers’ personal characteristics play a major part in the choice, and continuance, of current ownership and governance systems. Equally as important, they, and therefore the land ownership system, play a part in the efficiency of production systems and improvement of the biological and production environment.The benefits and difficulties of commonly used ownership systems in Western society are reviewed. Using a sample of New Zealand (NZ) farms, a comparison of the managers’ features for owner/operator, partnership and corporate based systems is presented. There were significant differences in many variables including the farmers’ age, education, number of children, asset levels, years on the current farm, and similar, but more importantly, the farmers in the ownership system groups had differing personal characteristics. Significantly, despite the corporate based farms employing more professional assistance, the profit levels were similar across ownership systems leaving the farmers’ characteristics the main factors correlating with system choice. However, governance systems per se are only marginally correlated with production systems and efficiency.As successive generations of farmers are unlikely to have different characteristics, and corporate based systems continue to exhibit similar profit levels, relatively simple family based systems will continue to dominate farm land ownership and control. The trends suggest family farms will increase in size and involve family conglomerates facilitating the management of larger, and in many cases multiple, farms. While currently there are few differences in biological efficiency between ownership systems, given the efficiency benefits of size and scale, this could well change with the increase of family conglomerates. Relative to increasing corporatisation, the continuance of family based ownership and governance will also be of benefit to the environment. When developing land policies, these highlighted relationships should be taken into account. This study is a first to consider personal characteristics relative to ownership.     

家庭农场经营效率及其差异分析*——基于山东234个示范家庭农场的调查

[目的]文章通过对山东省家庭农场经营效率的实证分析,旨在厘清技术、规模对农场经营效率的促进作用,通过比较分析找出各类型家庭农场短板,针对性地提出政策建议。[方法]以山东234个家庭农场数据为例,运用DEA模型对家庭农场全样本及纯种植、种养结合、种植兼休闲、种养兼休闲4类家庭农场的经营效率进行了测算和分解。[结果]首先,家庭农场综合技术效率仅为0. 170,纯技术效率和规模效率分别为0. 235和0. 786,规模效率相对充分纯技术效率不足是经营效率较低的主要原因;其次,种养结合类农场发展势头较好,纯种植类家庭农场发展滞后且综合技术效率和纯技术效率最低,种养兼休闲类农场的规模效率最低。[结论] 4类农场差异明显,应降低生产技术使用门槛,引导农场主参加职业教育,提升纯种植类农场纯技术效率,同时出台相关政策,实现土地流转的降费提效,改善种养兼休闲类农场规模效率。