Technical Efficiency Of Farmers Research Articles

Assessing the impact of digital financial inclusion on agricultural total factor productivity in China

Based on panel data from the National rural fixed point survey from 2011 to 2018 and the Peking University digital financial inclusion (DFI) index data, this article uses the dynamic panel fixed effect model to analyze the effect of access to digital inclusive financing platforms on agricultural total factor productivity (TFP) and its contributing factors at the household level. The results show that DFI have a significant hysteresis positive impact on agricultural TFP and its two components, agricultural technical progress and agricultural technical efficiency change. And the usage depth of financial services has the greatest effect in three dimensions of DFI index.

What kinds of subsidies affect technical efficiency? The case of Italian dairy farms

AbstractThe relationship between subsidies and the technical efficiency of farms has important policy implications. The impact on efficiency can depend on the type of grant. Here, three macrocategories of subsidy are distinguished. With reference to a large sample of Italian dairy farms, the macrocategory of rural development payments is further broken down according to the main types of subsidy received. A stochastic frontier analysis based on the Farm Accountancy Data Network reveals a heterogeneous influence of these categories. Subsidies coupled with production are associated with greater efficiency. Decoupled grants have a negative influence on efficiency when pursuing agri‐environmental policy objectives, and no impact on efficiency when supporting the income of farms or promoting the transfer of knowledge and competitiveness. [EconLit Citations: C13, Q12].

Do farmers' professional cooperatives improve agricultural technical efficiency? Evidence using a national‐level dataset of China

AbstractThis study examines the impact of farmers' professional cooperatives (FPCs) on agricultural technical efficiency (TE), using panel data from 30 provinces of China from 2015 to 2020 and the stochastic frontier function (SFF) method. The number of members of each cooperative, the proportion of demonstration cooperatives, and the proportion of standard cooperatives are introduced as proxy variables for the development level of FPCs. The results show that although the development of FPCs is imperfect, its development has a significant positive impact on improving China's agricultural TE. Through the continuous increase in the number of cooperative members and the vigorous promotion of standardized production, agricultural TE has been significantly improved. However, the construction of model cooperatives has not played a positive role but inhibited the growth of agricultural TE. It is suggested to expand the cooperative membership and promote standardized production. The government and policymakers should focus on improving the standardization level of cooperatives and the development quality of FPCs from the aspects of innovating cooperation models, standardizing internal governance, and giving full play to the synergistic effect of agricultural science and technology.

Wastewater Irrigation: A Promising Way for Future Sustainable Agriculture and Food Security in the United Arab Emirates

In the recent past, the production of wastewater from domestic and industrial sources steadily increased through population growth, urbanization, the Industrial Revolution, and economic development. In the world, 80% of wastewater consists of several harmful substances and hazardous chemicals that cause many deadly effects on human beings as well as ecosystems. So, the elimination of this toxic substance before discarding it into landfills is utilized as an alternative source of water which is an emerging need. Using treated wastewater for agricultural purposes is an excellent approach to rendering wastewater beneficial. As the quantity of wastewater grows, it becomes necessity to redistribute the water in a beneficial way. The rapidly increasing world population will undoubtedly increase the food demand, which directly requires more water for irrigation purposes. The rapidly increasing world population rate will undoubtedly demand an increased food production rate, which directly impacts agricultural water usage. In order to achieve sustainability in terms of agricultural water usage, alternative water resources should be explored. In this review, we tried to focus on summarizing all the leading studies in the field of wastewater utilization, the most prominent treatment methods, and a benchmarking of their technical efficiency in agriculture with special emphasis on agriculture in the marginal lands, with special emphasis on the United Arab Emirates.

Does sending farmers back to school increase technical efficiency of maize production? Impact assessment of a farmer field school programme in Indonesia

A farmer field school programme aims to impart knowledge and promote new technology. The programme is expected to enhance farmers’ performances. However, the empirical evidence remains unclear. A few studies have examined the impact of this programme on technical efficiency in Indonesia. The current study specifically investigates the causal impact of the Farmer Field School of Integrated Crop Management (FFS-ICM) programme on technical efficiency of maize production in Indonesia. We used a stochastic production frontier model and propensity score matching (PSM) to examine the causal impact of FFS-ICM on the technical efficiency of maize production. The results show that the average farm technical efficiency is 68.3%, which suggests that the production can be further improved. The PSM estimation indicates that FFS-ICM increased the technical efficiency by 1.48%, demonstrating the importance of agricultural extension programmes in rural areas in Indonesia. Nevertheless, the relatively small estimated impact raises the issue of cost effectiveness of the programme.

Dealing with endogeneity in risk analysis within the stochastic frontier approach in agricultural economics: A scoping review

Literature on farm productivity and efficiency was reviewed using a scoping review methodology, focusing on studies that have included risk and risk management tools within the stochastic frontier analysis in agricultural economics. This study contributes to investigating the methods used to account for endogeneity by using a risk-accommodating stochastic frontier approach when analysing farmers’ performance. Despite the increasing methodologies proposed in the literature, only a few studies have treated endogeneity in farm risk-performance evaluations. According to our findings, it can be concluded that there is a literature gap regarding the adoption of a comprehensive approach capable of dealing with endogeneity when assessing farm performances. Endogeneity and risk issues need to be concurrently addressed to make strides in achieving economic and environmental sustainability. Neglecting endogeneity in these analyses may lead to biased estimates and thus inappropriate policy recommendations failing to boost the productivity and technical efficiency of farmers.

The common agricultural policy subsidies and the technical efficiency of Hungarian wine farms

PurposeThe literature argues on ambiguous impacts of different types of the common agricultural policy (CAP) subsidies on farm technical efficiency (TE). The purpose of this paper is to estimate and analyse the TE and the impact of the CAP subsidies on the TE of wine farms in Hungary using the farm accountancy data network data set in the period 2013–2019.Design/methodology/approachThe authors use stochastic frontiers analysis (SFA) models to estimate the TE scores for the Hungarian wine farms with four wine farm-level inputs in terms of agricultural land, labour, capital and intermediate consumption. The TE scores are explained by the CAP subsidies and economic wine farm size. The different SFA models were applied with robustness tests to investigate the drivers of the TE values of wineries.FindingsLike for Hungarian farms in general, the distribution of the wine farm structure is a dual with a greater number of smaller wine farms and a smaller number of bigger wine farms. The agricultural land, capital and intermediate consumption are significantly positively associated with the wine farm TE. With higher capital intensity wine farm TE increase. The results imply that the CAP subsidies decrease the TE of the Hungarian wine farms, whereas economic farm size increase.Originality/valueTo the best of the authors’ knowledge, this is one of the first specific efficiency studies on the wine sector in the Central and Eastern European region and the first one for Hungary to evaluate the TE at wine farm level and to assess the impact of CAP subsidies and economic farm size on wine farm (in)efficiency to apply production technologies and use farm resources. This study is among the first that applied the fixed-effects stochastic frontier model at the wine farm level to measure the drivers of the TE scores.

Does Farmers’ Lottery Participation Affect Technical Efficiency of Banana Production in Rural China?

Increasing the agricultural technical efficiency is crucial to poverty reduction for smallholder farmers in developing countries. This study attempts to examine the impact of farmers’ lottery participation on technical efficiency from the perspective of the farmers’ revealed risk preferences, and to explore the influence mechanism between lottery participation and technical efficiency, based on the primary data collected from banana farmers in rural China. We used data envelopment analysis (DEA) to measure the combined technical efficiency of the farmers and constructed an endogenous switching regressions (ESR) model to analyse the impact of lottery participation on the technical efficiency of banana farms. A quantile regression model was used to analyse the heterogeneous effects under the different levels of the farmers’ technical efficiency. Then, a mediation model was employed to clarify the influence mechanism of lottery participation on technical efficiency in terms of two pathways: the adoption of biopesticide and the soil improvement technique. The empirical results show that farmers’ lottery participation revealed their risk preferences and several factors affected banana farmers’ participation in the lottery. Specifically, male farmers are more likely to participated in the lottery than female; farmers’ working hours negatively affected their lottery participation; and the use of a smartphone significantly increased the likelihood of farmers buying lottery tickets. We also found that farmers who participate in the lottery have higher technical efficiency in banana production, and the average treatment effect of lottery participation on the technical efficiency was 21.5%, indicating that the farmers with revealed risk preferences can significantly promote technical efficiency. The effect of risk preferences on economic performance is more significant for farmers at the middle technical efficiency level. The explanation is that the adoption of new technologies (e.g., biopesticides) played a mediating effect between farmers’ lottery participation and their technical efficiency. New technologies are more likely to be adopted by farmers who participate in the lottery, resulting in higher technical efficiency. Therefore, policymakers and stakeholders can better design technology extension programs according to the different attitudes of the target farmers towards risks in developing regions.

Effects of Organic Fertilizer Substitution on the Technical Efficiency among Farmers: Evidence from Bohai Rim Region in China

Using organic fertilizer to replace chemical fertilizer is an effective way to promote sustainable agricultural development. Based on survey data of 514 farmers from five provinces and cities in the Bohai Rim region of China, collected in 2019, organic fertilizer substitution’s effects on farmers’ technical efficiency were analyzed. The PSM method is used to solve the problem of farmers’ self-selection. Considering the causal relationship between the substitution behavior of organic fertilizer and farmers’ technical efficiency, the IV-Tobit model, 2SLS, and ML estimation methods are used to solve the endogenous problem. The study found that: (1) quality and safety awareness, part-time employment level, participation in insurance, and training significantly promote using organic fertilizers to replace chemical fertilizers; (2) the technical efficiency of farmers who use organic fertilizer to substitute the chemical fertilizers is 0.625, 9.46% higher than their counterparts; and (3) the promotion effect of organic fertilizer substitution on technical efficiency has heterogeneity, which has a significant role among small-scale farmer households with fewer and low-educated family laborers. Regarding the policy implications, it is necessary to strengthen agricultural subsidies by improving the accuracy of policy formulation and implementation, fully considering the heterogeneity of farmers for implementation.

HOW USING WEATHER AND CLIMATE INFORMATION SERVICES MAY IMPACT FARM PRODUCTIVITY AND TECHNICAL EFFICIENCY: EVIDENCE FROM COWPEA AND SESAME PRODUCERS IN BURKINA FASO

Weather and climate information services (WCIS) are recognized as a powerful tool to support the management of climate risk in the context of climate variability. However, the picture of its value for agriculture is not yet well evaluated. This study used the Average Treatment Effect (ATE) framework to assess the impact of WCIS use on yield, income and technical efficiency of cowpea and sesame production in Burkina Faso. The study involved 170 farmers from 17 villages including 11 experimental villages exposed to WCIS and 6 control villages not exposed. The study found that farmers exposed to WCIS changed their crop management’s practices. A significant number of farmers used forecasts of the rainy season’ length and the onset date to choose which crop and variety to grow, which location and size of plots to crop. Daily forecast information was used for farm crop operations (choosing the date of land preparation, sowing, fertilizing, weeding, etc.), while the seasonal forecast was used for strategic decision (selection of crop and production site location). The use of farm inputs and labor requirements are different between climate-informed farmers and non-exposed farmers, the latter farmers tending to use more labor. The study showed that cowpea producers using WCIS obtained significantly higher yields (848[Formula: see text]kg/ha on an average compared to 675[Formula: see text]kg/ha for non-WCIS users); higher gross margin (34% higher than non-users). However, the impact of WCIS was not significant for sesame production. This may translate the strong linkage and dependence of the effectiveness of using WCIS with other factors than just climate variability, particularly the ability of the farmer to understand and apply relevant agro-met-advisories and crop–soil–water attributes.

Automation and efficiency: A latent class analysis of Irish dairy farms

AbstractAutomation has always played a significant role in the productivity and efficiency of agriculture. This paper explores the role of automation on farms' technical efficiency (TE) in an expanding dairy sector. We use a representative sample of Irish dairy farms that includes detailed data on automated technologies. We apply a latent class stochastic frontier model to assess technology heterogeneity amongst Irish dairy farms to obtain their TE scores. We identify two classes of farms: smaller, less intensive and larger, and more intensive farms. We find significant differences between the classes in relation to farm characteristics, input use, labour efficiency, and TE scores. Larger, more intensive farms produce closer to their stochastic frontier. Our findings also suggest that automation has a heterogeneous effect on farms' TE depending on farms' classification. Specifically, adopting automated cluster removers and scrapers is associated with higher TE on smaller, less intensive farms. In contrast, automated parlour feeders are positively associated with larger, more intensive farms' TE. Finally, the implications of adopting automated technologies on Irish farms are discussed.

Avaliação da eficiência técnica da produção de trigo dos agricultores com base no aumento da renda

ABSTRACT: Based on the goal of income increasing, this research uses the DEA-BCC model under the input and the output orientation to estimate the differences and changes in the technical efficiency of wheat production by farmers of different scales based on the survey data of 1669 farmers’ wheat production from China’s main wheat-producing regions. Results showed that there are significant differences in the technical efficiency of farmer’s wheat production and the optimal scale of efficiency under the input and the output orientation. The relationship between farmers’ planting scale and efficiency is characterized by U-shaped curves and inverted U-shaped curves respectively. The wheat production technical efficiency of farmers in most major grain production areas is in a DEA ineffective state, and agricultural technical efficiency needs to be improved.

Determinants of technical efficiency and farmers’ crop choice rationality: A case study of rural Gansu, China

Land exchange based on market transactions in which lessors and lessees participate voluntarily not only makes them better off but also enhances the overall efficiency of land use and agricultural production. However, it is worthwhile to empirically explore the effect of land rental on overall technical efficiency in the context of Chinese agriculture because non-farm household producers have increasingly entered the farming business as cultivators. If such producers underperform farm households in terms of efficiency, land consolidation does not necessarily deliver the desired outcome. This study demonstrates that the development of land rental markets improves agricultural technical efficiency at the aggregate level. Another important issue addressed in this study is to examine farmers’ crop choice rationality. China offers an interesting case in this respect. This is because, while the central government has long strived to maintain a high grain self-sufficiency rate, the relative prices of farm products have recently moved in favor of non-grain products. Our empirical result suggests that there is room for further increase in farm revenues of Gansu’s producers by shifting resources away from cereal toward horticultural production.

The Impact of the Urbanization Process on Agricultural Technical Efficiency in Northeast China

In this paper, on the basis of a theoretical analysis, we quantitatively explore the impact of urbanization on agricultural technical efficiency after measuring the agricultural technical efficiency and the urbanization level, from the perspective of different dimensions in 34 prefecture-level cities in Northeast China, using the SE-DEA model, entropy-TOPSIS method, and the panel regression model. The results show that, except for some cities that achieved technical efficiency in individual years, such as Yichun in 2012 (1.003), and Benxi in 2015 and 2016 (1.011 and 1.254, respectively), the overall level of agricultural technical efficiency in the Northeast Region is still relatively low. The level of overall urbanization in Liaoning was significantly higher than that in Heilongjiang and Jilin. The population urbanization and land urbanization levels of most cities were relatively high, but an obvious improvement trend was not observed. Some cities even appeared to undergo the phenomenon of “anti-urbanization”, and the economic urbanization showed an obvious characteristic of “high begins and low ends” in the Northeast. Moreover, except for the population urbanization, the overall urbanization, land urbanization, and economic urbanization all had a significant positive effect on the agricultural technical efficiency; the effect in Heilongjiang province was higher than that in Liaoning province, and Heilongjiang province showed an obvious catch-up trend. While enriching the research on urbanization and efficiency, this study provided political implications on strengthening the flow of factors between the urban and rural, improving the investment in technology and labor training, and improving the compensation mechanism.

How mitigation efforts moderate the impact of climate change on agricultural efficiency: a preliminary analysis from China

ABSTRACTIn this paper, we empirically evaluate the effect of climate change on agricultural technical efficiency, considering the moderating effect of mitigation efforts based on emission reduction in China. In particular, we directly measure the intensity of mitigation efforts using the climate change mitigation index. We then apply the two-stage double bootstrap DEA method to build up the empirical model, effectively avoiding biased estimation using the traditional two-stage DEA method. Our results show that the intensity of mitigation measures moderates the impacts of global warming on efficiency and mild mitigation measures are better than drastic ones.

Farm technical and environmental efficiency and subsidy redistribution in Ireland: A simulation approach of possible performance and equity effects

AbstractWe investigate the relationship between EU Common Agricultural Policy environmental payments, and dairy and beef farm level competitiveness and environmental performance. We use an Irish panel of farm level financial data for the years 2000–2017 and apply stochastic frontier analysis. Our estimates identify a positive relationship between technical efficiency and the Green, Low‐Carbon, Agri‐Environment Scheme for dairy farms, in contrast with the negative relation identified for previous payments of this kind such as the Rural Environment Protection Scheme for both beef and dairy. We then simulate increases in the first type of environmental payments financed through reductions in decoupled payments. We use alternative scenarios for payment redistribution such as flat allocation, allocation to farms with low stocking rates or proportional reallocation of payments. We find that under the second scenario, marginal environmental gains can potentially be achieved for dairy farms. For beef farms, the proportional allocation performs best regarding environmental gains. We also find that under this scenario, the impacts on income inequality can be smoothed for both farm types.

The role of family life‐cycle events on persistent and transient inefficiencies in less favoured areas

AbstractFamily farms dominate less favoured areas (LFAs) within Europe, and family life‐cycle conditions, such as succession and retirement, affects how these farms adapt to changing circumstances. Past studies of on‐farm technical efficiency have not directly addressed these conditions, but they may explain why some farms are more efficient than others, especially as the farm family model dominates most farming systems. Motivated by the UK's withdrawal from the EU and the debate around establishing replacement support policies, we apply a multi‐step model to measure both transient and persistent inefficiencies using a panel of LFA cattle and sheep farms in Scotland over the period 2003–2020. We find a greater prevalence of persistent compared to transient inefficiency, which suggests that structural problems still exist. Farms with planned succession are found to have higher persistent efficiencies, whereas farmers nearing retirement have lower levels. Other factors, such as dependence on subsidy, off‐farm activity and classification as severely disadvantaged tend to compound these lower efficiencies. We argue that life‐cycle conditions should not be ignored in studies of farm technical efficiency. Within the scope of framing a new agricultural policy for UK administrations, these results inform the debate on support for LFAs, as well as the promotion of support towards generational renewal to ease transition across farm family life‐cycle events.

Application Research of Fuzzy Control Comprehensive Model in Agricultural Economic Management

Agriculture is the basic industry of the national economy, and the transformation of agricultural economic growth mode is of great significance to ensure the supply of agricultural products and improve the quality of agricultural products. Therefore, it is the only way to solve this problem to change the way of agricultural economic growth through scientific and technological investment, industrial structure adjustment, and other methods. Based on the fuzzy comprehensive evaluation method, this paper analyzes various factors of agricultural economic development and establishes a multilevel fuzzy comprehensive evaluation model of the development status of agricultural economic system. The stochastic frontier production function model of the fuzzy control comprehensive model is applied to decompose the agricultural labor productivity, and the counterfactual thinking and distribution method are used to analyze the influence of these factors on the evolution of provincial agricultural labor productivity differences. The value inequality decomposition method measures the contribution of each factor to the provincial agricultural labor productivity difference as well as the contribution of exogenous explanatory variables to the provincial agricultural technical efficiency difference. It is concluded that the relative contribution rate of nonagricultural activities to the difference in agricultural technical efficiency is the largest, and the average relative contribution rate reaches 74%. The improvement of agricultural labor productivity cannot rely solely on the increase in the input of agricultural material factors, but should rely on science and technology.

Technical efficiency and complementarity of agroecological innovations in French West Indies banana production

ABSTRACT In context of global challenges facing agriculture, our article addresses the extent to which the synergistic nature of agroecological innovations may reconcile environmental and technical efficiency of farms. We develop an empirical model, namely conditional efficiency framework, which explicitly accounts for context-dependent drivers like synergy and complementarity of innovations. Using a sample of 567 banana farms in the French West Indies, our estimates confirm the complementarity effect since the joint adoption of agroecological innovations increases the technical efficiency scores much more than other drivers and each of the innovations taken in isolation. We also show that advice and extension services as well as human capital variables are key adoption levers for public policy since they reduce the variability of production and thus the risk associated with the joint adoption of the agroecological innovations.

Evaluation of Technical Efficiency in Exotic Carp Polyculture in Northern India: Conventional DEA vs. Bootstrapping Methods

The paper adopts the conventional data envelopment analysis (DEA) and bootstrap procedure to analyze the technical efficiency, while tobit regression is applied to identify the factors affecting efficiencies of exotic fish polyculture in Jammu and Kashmir (India). According to the statistical analysis of the variables utilized, there was a lot of variability in the inputs being used by the farmers, with the most variation being in the lime input. The DEA estimated technical efficiency for the sample farms in Jammu and Kashmir is 0.9771 and 0.9741, respectively, with least technical inefficiency of 3%. The bias-corrected (bootstrapped) technical efficiencies found were slightly lower than the ones estimated by conventional DEA. Mean allocative and cost efficiencies for sample farms in the Jammu region were 92% and 75%, respectively, and 84% and 74%, respectively, for farmers in the Kashmir region. Farming experience, age, and education have favorable impacts on technical efficiency of farmers in the state, but family size showed negative impacts. Efficiency improvement will eventually lead to increase in the production providing better scope for marketed surplus. More fisheries extension is suggested for expanding the exotic fish culture in the state making the enterprise a more profitable venture.