Abstract
Tunisia olive production fluctuates yearly because it is highly dependent on annual precipitation, and growers need to enhance productivity and efficiency by introducing irrigation. Investigating how irrigation affects the technical efficiency of olive production may contribute to improvement in productivity. This study employs the Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA) methods to estimate non-parametric and parametric frontiers for a sample of Tunisian olive orchards. It identifies factors which determine variations in technical and scale efficiencies among orchards. The DEA results show that average output-oriented technical efficiency under constant returns to scale (CRS) and variable returns to scale (VRS) is 8.9 and 17.8%, respectively. The SFA results show that average technical efficiency of the half-normal model with constant returns to scale is estimated at 81.2%, indicating Tunisian olive growers can raise output by an average of 18.8% by improving technology and using fewer inputs. Average technical efficiency in irrigated orchards under the DEA approach was higher than in irrigated ones while irrigated orchards under the SFA approach was less technically efficient than non-irrigated ones. However, the test results of mean difference indicate that average VRS technical and scale efficiencies in irrigated orchards under the DEA approach were not significantly higher than in non-irrigated ones. On the other hand, technical rather than scale inefficiency is the major source of overall inefficiency in irrigated orchards because room for improvement in technical efficiency was larger than in scale efficiency. These results suggest that Tunisian olive growers should raise output and efficiency by introducing more advanced technologies for improving the performance of irrigation systems. Key words: Olive orchards, technical efficiency, scale efficiency, irrigation, Tunisia.
Highlights
In Tunisia olives are vital to the domestic economy and financial resources, especially in impoverished rural areas, accounting for 15.7% of Tunisia’s agricultural production in 2013 (NIS, 2016)
The Stochastic Frontier Analysis (SFA) results show that average technical efficiency of the half-normal model with constant returns to scale is estimated at 81.2%, indicating Tunisian olive growers can raise output by an average of 18.8% by improving technology and using fewer inputs
Estimations of technical efficiency under the variable returns to scale (VRS) Data Envelopment Analysis (DEA) generally mirrored those of the SFA under constant returns to scale (CRS) specification with the exception of results for mechanization, the share of employed labour in total labour and the share of irrigated area to total
Summary
In Tunisia olives are vital to the domestic economy and financial resources, especially in impoverished rural areas, accounting for 15.7% of Tunisia’s agricultural production in 2013 (NIS, 2016). Of olive oil is central to Tunisia’s national development strategy following the Euro-Mediterranean Partnership eliminated export quotas, tariffs and trade barriers on agricultural commodities. According to Food and Agriculture Organization of the United Nations (FAO) statistics, the export of olive oil occupies 19.7% of the country’s agricultural exports in 2013. Enhancing productivity and technical efficiency has become a primary challenge for Tunisia’s olive growers. To stabilize and increase production, the Tunisian government encourages olive growers to introduce irrigation and to increase the proportion of their orchards under irrigation. Given the country’s limited water resources, investigating how irrigation affects the technical efficiency of olive production may contribute to improvement in productivity
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