Determinants Of Technical Inefficiency Research Articles

Technical efficiency in several levels of adoption of garlic farming standard operating procedures in production centre in Indonesia

The relevance of this study lies in overcome obstacles to garlic development in Indonesia, such as low productivity and limited use of technology, which can hinder self-sufficiency and import-reducing programs. The purpose of this study was to identify the technical efficiency, the determinants of technical inefficiency, and the level of technical efficiency at various levels of adoption of the standard operating procedures of garlic farming in production centres in Indonesia. The cross-sectional data was gathered through interviews with 227 farmers chosen using a simple random selection technique. The Cobb-Douglass production function and the stochastic frontier analysis were used to determine the factors influencing garlic production, the technical efficiency level, and the determinants of technical inefficiency. The Maximum Likelihood Estimation was used to analyse the data. The level of technical efficiency at various levels of standard operating procedures adoption was measured using descriptive statistical analysis. Farm size, seeds, urea and NPK fertiliser, herbicides, yellow sticky traps, family labour, mulch, and farmers’ participation in garlic development programs significantly affected garlic production. The technical efficiency varied within 0.37-0.99, with a mean of 0.71. Farmers’ practices and standard operating procedure adoption significantly reduced technical inefficiency. Generally, the level of standard operating procedure adoption is moderate. In the high standard operating procedure adoption group, the mean technical efficiency is 0.77, while in the moderate level group, it is 0.68. The findings of this study can be used as a model for other garlic-importing countries to enhance production and strengthen food security

Determinants of Technical Inefficiency in Wheat Production: An Application of the Stochastic Frontier Model - Nigeria

This study examined wheat farming technical efficiency, its determinants and wheat production constraints among wheat farmers in the wheat producing states of Nigeria. The study did not cover Borno and Yobe wheat producing states due to volatile insecurity situation in the areas. Primary data were obtained from 866 farmers using proportionate selection from the states list of farmers. A structured questionnaire and interview schedule were administered to the farmers to collect data for the study. A Stochastic frontier model was used to capture wheat production efficiency and its determinants while, Likert scale was employed to reveal severity of wheat production constraints among farmers in the study area. Land size, quantity of seed planted, quantity of NPK fertilizer applied, quantity of Urea fertilizer applied and labour used in man-day were found to be positive and statistically significant. The most severe constraints affecting wheat production in the study area were poor access to credit, lack of dependable wheat market outlay, and access to improved and quality seed among others. There should be adequate incentives (timely supply of improved wheat seed, fertilizer and irrigation facilities at affordable prices.

Technical Efficiency of Ginger Production in Ilam District of Nepal: A Stochastic Production Frontier Approach

This study measured the level of technical efficiency among smallholder ginger growers and examined the determinants of inefficiency by employing the stochastic frontier production function. The paper used a simple random sampling technique to interview 100 ginger farmers in Ilam, a leading ginger-producing district in Nepal, with the help of a pretested interview schedule. The STATA.13 software was used to obtain both stochastic frontier estimates and the determinants of technical inefficiency. The results revealed that the average farm-level technical efficiency is 67.8% which shows the scope of increasing the technical efficiency by 32.2%. The coefficients of seed and farmyard manure were positive and showed significant relation to ginger output at a 1% and 5% level of significance, respectively. Education level, training, and membership in cooperatives had a negative and significant impact on technical inefficiency, whereas areas under ginger production had a positive impact on technical inefficiency. Hence, improving the technical knowledge of farmers through training on optimum input use complemented with motivation to join agriculture cooperatives and farmer’s associations may increase the technical efficiency of ginger growers in the study area.

Technical efficiency and its determinants: Paddy farming in Mahakanumulla cascade system

Paddy farming is predominantly practiced in the dry zone of Sri Lanka. Most paddy lands in the dry zone belong to traditional hydrological cascade systems known as Village Tank Cascade Systems (VTCS) and paddy lands receive irrigation water from the tanks in VTCS. Land is a scarce resource for agriculture in Sri Lanka. Therefore, it is important to achieve high efficiency in paddy farming to increase paddy production in the country. A paddy farm is technically efficient if it is producing the maximum output using the minimum quantities of inputs, such as labour, capital, and technology. This study examines technical efficiency of paddy farmers in Mahakanumulla VTCS and its determinants. The technical efficiency of the farmers is estimated using parametric frontier technique; the Stochastic Frontier Analysis (SFA). In the first stage of the analysis a production function is estimated using the Maximum Likelihood Estimator. In the second stage, an inefficacy model is estimated with plot size, age, experience, household size, full time farming, and land ownership status as determinants of technical inefficiency. According to the results, the average technical efficiency of paddy farmers in Mahakanumulla VTCS is 92.3%. Only the plot size, experience, and household size are positively related to technical inefficiency and significant at 10%. According to the study findings, the technical efficiency of paddy farmers in Mahakanumulla VTCS does not vary significantly from the most efficient farmer in the area. This could be due to the fact that in the VTCS, farmers are operating under more homogenous conditions. However, it does not indicate that paddy farmers in Mahakanumulla VTCS are highly productive as results only reveal the technical efficiency level of paddy farmers in comparison to the most efficient paddy farmer in the area. Therefore, it is important that productivity improvements are continuously carried out.

TECHNICAL EFFICIENCY OF RICE FARMING USING CERTIFIED SEED IN INDRAMAYU REGENCY

Rice Farming Technical Efficiency Using Certified Seeds in Indramayu Regency. Production inputs used in rice farming can affect crop yields. Yields can be increased through technical efficiency or production efficiency approaches. Technical efficiency is defined as an effort to increase the maximum output from the use of a certain number of inputs or technology. This study aims to analyze the technical efficiency and determinants of technical inefficiency in rice farming using certified seeds in Indramayu Regency. The data collected were in the form of production inputs and farmer characteristics from several farmers whose rice farming used certified seeds in Jatibarang, Bangodua, Widasari and Cikedung Districts with a total sample of 84 respondents. Technical efficiency and determinants of technical inefficiency were analyzed using the Stochastic Frontier Analysis (SFA) approach. The results of the analysis show that rice farming using certified seeds in Indramayu Regency is technically efficient with an average technical efficiency value of 0.93. Production inputs that affect technical efficiency include land, seeds, nitrogen nutrients, phosphate nutrients, potassium and pesticides. Land, seeds, phosphate and potassium nutrients significantly affect technical efficiency at the 1% real level, while nitrogen and pesticide nutrients have a significant effect on technical efficiency at the 5% real level. Variables that affect technical inefficiency include age and experience of farmers. Farmer’s age has an effect on technical inefficiency at the real level of 5%, while farmer’s experience has a significant effect on technical inefficiency at the real level of 10%. The conclusion is that rice farming using certified seeds in Indramayu Regency is technically efficient.

Determinants of technical inefficiency in China's coal-fired power plants and policy recommendations for CO2 mitigation.

This study applies data envelopment analysis (DEA) to estimate the technical efficiency (TE) and CO2 emission reduction potential of 1270 coal-fired power plants in 28 Chinese provinces and municipalities. The large dataset used in the study includes 727 combined heat and power (CHP) plants and 543 thermal power plants. Results show an average TE score of 0.57 for the CHP power plants and 0.58 for the thermal power plants, suggesting a significant potential to reduce coal consumption in both types of coal-fired plants. Total CO2 emission reduction potential was estimated to be 953 Mt-CO2, or 19% of the total CO2 emissions of China's electricity and heat producing sectors, indicating that China's coal-fired power plants have a significant potential to mitigate CO2 emissions through technological improvement. In the second stage of the study, a Tobit regression analysis was conducted to identify the determinants of TE. Factors such as the plant's annual operation rate and capacity utilization rate were found to be significant influences. Based on our results, we propose that the Chinese government create a power distribution structure that generates electricity using technologically efficient equipment in areas rich in coal resources and distributes the generated electricity to other areas of the country.

Determinants of Technical In-efficiencies in Swamp Rice Farming - Ciamis District, Indonesia

Rice farming in swamps, a marginal land, has a relatively high risk related to the level of technical efficiency. This research was conducted with the aim of identifying the level of technical efficiency and the influence factors of technical inefficiency in Lakbok Subdistrict, Ciamis District, Indonesia. Simple random sampling was used with a sample size of 41 farmers. The analysis was carried out using a stochastic frontier function. The results showed that the average level of technical efficiency was 0.78. Education and family size have a significant effect on technical inefficiency.

Analysis of technical efficiency among rice farmers in Ebonyi State of Nigeria: A stochastic frontier approach

This paper analysed the technical efficiency of rice farmers in Ebonyi State, Nigeria. It specifically analysed the levels and determinants of technical efficiency. A multistage sampling technique was adopted for sample selection. A total of 150 well-structured questionnaires were distributed but only 91 were returned. The Cobb-Douglas production function model was used to predict the farm level technical efficiency. Results from the Cobb- Douglas Regression showed a sigma square (σ2) of 0.06584 which was statistically significant at 1 percent. The technical efficiency scores among the rice farmers ranged from 0.012 to 1.000 with a mean of 0.350. Farm size, quantity of rice seedlings, quantity of fertilizer and quantity of agrochemical all were showed positive correlation with coefficients of 0.93511, 0.08310, 0.11200 and 0.14345 respectively while farm labour showed a negative correlation with technical efficiency. The determinants of technical inefficiency were age, household size and extension visits. This paper advocates the strengthening of existing extension system for timely sourcing of highly improved rice varieties and subsidized fertilizer. There is the need to enhance farmers’ technical efficiency through adequate training on optimum input mix.
 Keywords: Rice production, technical efficiency, cobb-douglas production function

Determinants of Technical Inefficiency of Saccos in Kenya: Total Revenue Output Slack Analysis

This study assessed the determinants of technical inefficiency of Saccos in Kenya. The explanatory research design was applied. The certified annual reports information was collected from a census total of 46 deposit taking Saccos and methods used in estimation of technical inefficiency were both non-parametric DEA and parametric SFA. The log truncated panel data covered a period of 8 years (2007-2014). The result indicates insignificant influence of all predictor variables on inefficiency given total revenue output (TR) slack as hypothesized in agency, x-inefficiency and intermediation theories. TR slack regression reflects a significant managerial influence as indicated by Gamma (0.999956). However, DEA result of all Saccos showed 0.024 mean inefficiency. The TR slack is key in identifying managerial inefficiency, thus apt for decision making while the relationship between earnings management and the insignificance of predictors given TR slack, should be explored in the future studies. Keywords: Saccos in Kenya, Technical Inefficiency, Total Revenue Output Slack. DOI: 10.7176/RJFA/11-8-05 Publication date: April 30 th 2020

Technical Efficiency of Agricultural Production in Ethiopia

Farmers faced low productivity due to lack of knowledge on maximizing level of output at the given level of inputs. Technical efficiency of agricultural production in the Ethiopia were assessed by using cross-sectional secondary data collected from Ethiopia socioeconomic survey in 2015/16 production year. Cobb-Douglas stochastic frontier production function model was used to estimate technology and determinants of technical inefficiency simultaneously using the maximum likelihood estimator (MLN). MLN estimation results showed that increasing input use like area, seed, oxen, fertilizer and labor would increase yield of agricultural production. The coefficients of elasticity for area, seed, oxen, fertilizer and labor were 0.21, 0.29, 0.38, 0.12 and 0.10 respectively. Consequently, agricultural production exhibits increasing return to scale because the sums of input elasticity’s were greater than one which is 1.1. The mean technical efficiency of farmers in the agricultural production was about 36%. The implication is that there is an opportunity to increase output on average by 64% through efficient use of inputs given the current input use and technology. The discrepancy ratio gamma (γ) which measures the relative deviation of output from the frontier due to inefficiency was about 86 percent indicating that about 86% of variation in agricultural production among the farmers was attributed to technical inefficiency effects. Thus, it is possible to improve technical efficiency through better use of these factors. Keywords: Technical efficiency, Cobb-Douglas stochastic frontier and Smallholders. DOI: 10.7176/JNSR/10-5-05 Publication date: March 31 st 2020

Estimation of technical efficiency and output growth decomposition for small-scale rice farmers in Eastern India

PurposeThe purpose of this paper is to estimate the degree of technical efficiency, determinants of technical inefficiencies and driving forces behind the production growth for a panel data set collected during the 1998/1999 and 2004/2006 Kharif cropping season, from 452 small-scale rice farming households in the Giridih and Purulia districts of Eastern India.Design/methodology/approachThe estimations of technical efficiency utilize stochastic frontier production function with a sub-model of inefficiency effects at both aggregated farm level and disaggregated plot level where traditional varieties (TVs) and high-yielding varieties (HYVs) are differentiated. The output growth decomposition analysis identifies the main contributor to the total rice production growth.FindingsThe results indicate that the sampled farms are operated at moderate levels of technical efficiency. The production of HYV rice is associated with higher technical efficiency compared to TV rice. Farming experience, education attainment, landholding size, the share of non-agricultural income and the share of land in the lower terraces account for the differences in technical inefficiencies across the sampled farms. The decomposition analysis suggests that as technical efficiency decreased, technical change is the main source of production growth during the survey period.Research limitations/implicationsThe small sample size applied in the analysis will result in an insufficient representativeness of the study area.Originality/valueThis paper fills the literature gap as estimations of technical efficiency that account for subtle differences in adopted rice varieties are still rare in India.

Resource misallocation and production inefficiency

PurposeRecent studies have linked differences in aggregate productivity to misallocation of resources across firms. In contrast, the purpose of this paper is to study the macroeconomic performance of OECD economies from a production efficiency point of view and estimated the determinants of (in)efficiency with particular emphasis on misallocation of labor.Design/methodology/approachFollowing the pioneering work of Battese and Coelli, the authors proposed a parametric methodology to construct a world frontier that serves as a benchmark to compare the relative position of each country. The non-negative technical inefficiency effects are assumed to be a function of explanatory variables. By doing this, determinants of technical inefficiency are explicitly introduced in the model.FindingsThe results revealed that OECD countries to operate efficiently should expand their aggregate output by 22.6 percent without consuming more resources. A novel finding is that higher skill mismatch is associated with higher production inefficiency. Conversely, more flexible labor markets, and better management and human resource practices, lowered the inefficiency in production. The paper also analyzed the underlying factors driving skill misallocation in the job market. In this regard, a well-functioning education and training system and greater flexibility in the determination of wages are associated with lower levels of mismatch between the skills of individuals and those required by the jobs.Practical implicationsThe measurement of the productive efficiency of an economy (or country) is crucial to governments. It is important to know how far a given economy can be expected to increase its output by simply increasing its efficiency, without absorbing further resources. In other words, it is relevant to know if a country could produce more with the same resources and, therefore, could increase per capita income and welfare. In this type of analysis what also matters is to identify what factors or variables explain that greater or lesser ability of a country to convert its resources into aggregate production.Originality/valueMuch research on efficiency measurement has focused on the firm or industry level, mainly to study the efficiency of financial institutions. Efficiency studies using aggregated data across countries are rare in the literature of efficiency. This paper aimed to contribute to filling that shortage evaluating the macroeconomic performance of a sample of OECD countries from the production efficiency point of view.

Determinants of Broadacre Farming Efficiency in Western Australia: A Stochastic Frontier Analysis

We analyse a rich panel dataset of farm production to determine the potential for broadacre farms in Western Australia to increase productivity through exploiting economies of scale and increasing technical efficiency. Using stochastic frontier analysis, we find that the majority of farms are operating below the optimal scale and would benefit from expansion, suggesting that a documented trend towards larger farms is desirable. We also observe a reasonable proportion of farms significantly below the efficient frontier, while differences between regional production functions and the metafrontier further contribute to inefficiency. Determinants of technical inefficiency were examined in the efficiency effects model; the adoption of technologies was aligned with reducing inefficiency, particularly in the cropping sector. This suggests the deployment of existing technologies should be a priority for both farmers and policy‐makers to further improve the efficiency of broadacre farms.

DETERMINANTS OF TECHNICAL INEFFICIENCY OF SACCOS IN KENYA: LOAN OUTPUT SLACK ANALYSIS

Purpose: The purpose of this study was to evaluate the determinants of technical inefficiency of Saccos in Kenya.Methodology: The study adopted a descriptive research design. This study collected secondary data analyzed from the audited reports of the licensed deposit taking Saccos and macro-economic indicators sources over the research period. It focuses on environmental and specific Saccos’ predictors affecting inefficiency of Saccos and measured the pure technical inefficiencies of Saccos during a period of pre-regulation and regulation. The explanatory research design was used. The financial reports data collected from a census of 46 Saccos was analyzed at two levels. First involves estimation of technical inefficiency by employing non-parametric DEA method and second concerned determination of inefficiency using parametric SFA. The log truncated panel data was used for a period of 8 years (2007-2014). The study was designed to address general objective of establishing the technical inefficiency, the macro-economic and specific Saccos variables determining the technical inefficiency of Saccos.Findings: The study concludes that all predictors jointly influence inefficiency and that are significant given loan to members’ output slack (LM) or loan output inefficiency. Further, LM slack regression reflects significant random normal error as indicated by Gamma (1.45E-32), and DEA result indicated 0.024 mean inefficiency.Contribution to theory, policy and practice: The regulators or board may not utilize the output loan slack regression to specifically measure the management inefficiency impact on Saccos’ operation while the Saccos predictor variables have significant influence on inefficiency. In addition, the random normal error indicates the influence of agency theory in Saccos is insignificant as the role of management influence given loan slack is minimal. The introduction of variables such as NPTA, MP, FLIB, CA, FI and LP in the financial reports of Saccos and inefficiency benchmarking using DEA and stochastic mechanism are important in regulation.

FAKTOR PENENTU INEFISIENSI TEKNIS PADA USAHA TERNAK KAMBING PERANAKAN ETTAWA

The study was conducted with the aim to find out the determinants of technical inefficiency in PE goat livestock farming. The study was conducted using case study on As-Salam Agribusiness Group in Sirnagalih Village, Indihiang Sub-district, Tasikmalaya City. Group members of 26 peoples were taken entirely as samples or conducted by census. The data obtained were analyzed by using multiple regression equation where parameter estimation was done by using SPSS 16. The results showed that the determinants of technical inefficiency in PE goat livestock farming were age, education, number of livestock ownership, family size and credit.

Assessing the Economic Efficiency of Maize Production in Northern Ghana

This study used the stochastic frontier model to examine the technical, allocative and economic efficiency of maize production in northern Ghana using cross-sectional data for the 2011/2012 cropping season. Conventional inputs such as farm size, seed, fertilizer, labour and weedicides were statistically significant and had positive effects on maize output in northern Ghana using the Cobb-Douglas functional form. The mean estimates were 85.1%, 87.8% and 74.7% for technical, allocative and economic efficiencies respectively. Largely, maize production in the study area exhibited increasing returns to scale. The determinants of technical inefficiency were experience, agricultural extension service and gender. Farmers with many years of experience in maize production were more technically efficient and opportunities that bring the less experienced farmers to tap the accumulated knowledge of the more experienced ones would improve maize production. Farmers who had access to agricultural extension services were more technically efficient than those who did not have access and strengthening the extension service would further enable them improve on their technical efficiency. Male farmers were more technically efficient than females in maize cultivation and efforts that stress gender equality as regards access to economic resources, information and decision-making would help narrow this gap. There is allocative inefficiency relative to all the production inputs under the prevailing prices. Land, seed and weedicides would be allocatively efficient by increasing their use by 26.6%, 10.52% and 39.9% respectively. Fertilizer and labour are currently being over-used and requires 82.8% and 94.5% reductions respectively to reach their allocatively efficient points. Keywords : Stochastic Frontier Analysis, Technical Efficiency, Allocative Efficiency, Economic Efficiency, Maize, Northern Ghana An Errata has been published for this article in vol 14 (2) 2017. You can find the link to this Errata here: https://www.ajol.info/index.php/gjds/article/view/162547 DOI: https://dx.doi.org/ 10.4314/gjds.v14i2.16

Technical efficiency among the food crop farmers in Rivers State Nigeria- a stochastic frontier approach

This study estimated technical efficiency and isolated determinants of technical inefficiency among food crop farmers in Rivers State, Nigeria. The data was collected with structured questionnaire from 180 food crop farmers randomly selected from 10 out of the 15 upland LGAs that make up Rivers State. A stochastic frontier production function was estimated by using the maximum likelihood estimation technique to obtain the technical efficiency of food crop farmers. The mean technical efficiency was 73 percent. The generalized likelihood test indicated that, the food crop farmers were not fully technically efficient in resource use. The determinants of technical inefficiency among the food crop farmers were extension contact and cooperative membership. There is 27 percent allowance to increase technical efficiency by implementing policies geared towards encouraging food crop farmers to join cooperative societies. This could be achieved by skewing credit liberalization in favour of food crop farmers who are members of cooperative societies. Furthermore, stepping up of extension contacts through the training of more extension agents among others is expected to increase the prevailing level of technical efficiency among food crop farmers in Rivers State, Nigeria.Keywords: Technical, efficiency; stochastic frontier; food, crop

Technical Efficiency of Tank Culture Systems in Peninsular Malaysia: An Application of Data Envelopment Analysis

The demand for animal protein especially fish is growing rapidly perhaps due to rapid expansion of population, increased incomes, and changes in eating habits and life styles of consumers. Capture fisheries are currently overexploited and their yield has become stagnant over the last decades and, in some cases, has even declined. Nevertheless, aquaculture has the potential to meet these challenges if well practiced. The study therefore, aims to estimate Technical Efficiency of tank culture systems using Data Envelopment Analysis (DEA). Additionally, it also investigates the determinants of technical inefficiency by employing a regression model. The estimated technical efficiency was 0.89, which means that the fish farmers can reach full technical efficiency through reducing their input usage by another 11%. Results indicate that farmer’s experience, educational level, extension training, job status, and water management have positive and statistically significant impacts on technical efficiency. Therefore, increase in any of these factors will have a direct impact on technical efficiency.

Comparative analysis of women’s contribution to food crop production in Kogi state, Nigeria

Women in Nigeria form a significant part of the population and are practically involved in agricultural activities. Based on the involvement of women in agriculture and in the rural economies of Nigeria, this study evaluates the contribution of women to food crop production. This is to establish knowledge about what farm inputs these women use in agriculture and how they combine these resources available to them in food production process as regards their efficiency. Four-staged sampling was conducted to survey a sample of 120 farmers (men and women) with the aid of an interview schedule. The data collected were for the 2009/2010 cropping season and analyzed with descriptive tools and stochastic production frontier. The result established that a high level of technical inefficiency exists among the sampled farmers. Age, household size and sex were found to be significant (p < 0.05) determinants of technical inefficiency that exists between the sampled farmers. To achieve efficiency in production among women farmers, it was recommended that inputs required, especially land, modern farm implement, accessible capital and extension services should be made available. The women should also be taught the better use of farm inputs to achieve efficiency in food crop production. Keywords : Food Production, Women, Agriculture, Kogi State, Efficiency

Measuring the technical efficiency and determinants of efficiency of rice (Oryza sativa) farms in Marmara region, Turkey

The objective of this study was to evaluate the technical and scale efficiency of sample rice (Oryza sativa) farms and subsequently identify determinants of technical inefficiency in the Balikesir and Edirne provinces of Turkey. An input oriented data envelopment analysis (DEA) was used to estimate technical efficiency scores. Additionally, Tobit regression was used to explain the variation in the efficiency scores related to farm‐specific factors. The data used in this study were based on a direct interview survey of 70 randomly selected rice farm households in the 2007 production year. Study results revealed that overall the technical efficiency score of sample rice farms was 0.92 on average and ranged from 0.75 to 1.00. Sample rice farms could reduce their inputs by c. 8% and still produce the same level of rice output. Calculated efficiency scores were subsequently regressed on explanatory variables using a Tobit analysis, to help in identifying inefficiency related factors. In this study, five explanatory variables were identified as being related to efficiency. The Tobit regression estimates showed that factors such as number of plots, farmer's age, and off‐farm income negatively influenced technical efficiency, whereas farm size and membership of a cooperative showed a positive relationship with efficiency.