Production efficiency of maize farmers under contract farming in Laos PDR

Abstract

Maize is the second largest commercial crop in Lao PDR, especially in the northern and southern regions. Traditionally, farmers in Lao PDR produced and distributed products in the market on their own. Recently, however, contract farming has gained in popularity and has become more widely accepted, especially after the country entered international collaborations under the Ayeyawady-ChaoPhraya-Mekong Economic Cooperation Strategy (ACMECS) and the Greater Mekong Sub-region (GMS). This study analyzed the technical efficiency of maize production under the contract farming system. Data were collected from the survey responses of 302 contract farmers in Lao PDR's northern and southern regions and were analyzed using stochastic nonparametric envelopment of data (StoNED). Maize production efficiency estimations were calculated using the Tobit model. The results revealed that the efficiency of contract maize farmers in Lao PDR was on average 0.85 and that the main factors affecting maize production efficiency were the age and education level of the farmer and area of planted land. Age and education level had significantly positive impacts, whereas planted land area had negative impacts.