Stochastic Frontier Production Function Research Articles

Assimilating the Responsible Factors for the Technical Efficiency of Organic Brown Sugar Production: Stochastic Frontier Approach

The demand for organic brown sugar has shown significant growth in recent years, presenting an opportunity to enhance production by strategically leveraging existing expertise among stakeholders. The objective of this study was to assess the viability of producing brown sugar, with a particular focus on the technical efficiency of marginal cane farmers. This study investigates the technical efficiency of sugarcane farmers who are concurrently engaged in the production of organic brown sugar within a specific region in Bangladesh. The data collection process involved the use of purposive sampling, which resulted in the collection of 163 farm data sets from September to December 2021. Subsequently, a stochastic frontier production function was carefully employed to estimate the technical efficiency of the selected brown sugar producers. The findings of the current study demonstrate that less than half of the respondents (47.24%) were involved in activities linked to maintain a high efficiency level that was greater than 91 percent. It was discovered that a range of technical efficiency scores, which varied from 49.94 to 98.38 percent, with a mean value of 84.5%. There exists a significant potential for enhancing crop productivity by up to 15.5% with the implementation of improved agricultural management techniques like substantial experience, education, and training which tends to exhibit enhanced the efficiency of the production.

Technical efficiency of early variety country bean cultivation in selected areas of Bangladesh: a stochastic frontier approach

The present study was undertaken to measure the profitability and technical efficiency of early variety country bean cultivation in selected areas of Chatmohar upazila of Pabna district. A total of 60 early variety country bean-growing farmers were selected from three villages of Chatmohar upazila using a simple random sampling technique. Stochastic frontier production function was applied to determine the technical efficiency of the country bean growers. Technical inefficiency effects model was also applied to identify the demographic and socio-economic factors by which inefficiency effects are influenced. The study revealed that Benefit Cost Ratio (BCR) was the highest (2.29) for large farmers followed by medium (2.27) and small farmers (2.21). The result of the Maximum Likelihood Estimates (MLE) showed that human labor, fencing and manure had significant positive impact whereas the irrigation and insecticides had a negative impact on the production of country bean. The results of technical inefficiency effect model showed that farmer’s age, farm size had negative impact while education, family size and farm credit had positive impact on technical efficiency. The inefficiency analysis results indicated that farm level technical efficiency ranged between 43.06% and 98.01% with a mean technical efficiency of 91.9% implied that there was potential to increase country bean production among smallholder farmers in the study area by 8.1% through efficient use of present technology. The main constraints to country bean (early variety) production were identified as- infestation of pest and disease, high price of inputs, paucity of quality seed and fertilizer, scarcity of human labor, lack of technical knowledge, limited access to institutional credit etc. Despite the constraints, there is a great prospect of early variety country bean production in the study areas. Country bean (early variety) production could be increased in a sustainable manner if farmers would be provided with government support regarding lower price of input, fair price of output, marketing facilities, training for farmers and farm credit at low interest rate, reducing the activities of syndicate of middlemen. Government should provide necessary support to the farmers for ensuring sustainable production of early varieties of country bean. Res. Agric. Livest. Fish. Vol. 10, No. 2, August 2023: 155-164

Does Solar-Powered Irrigation System Usage Increase the Technical Efficiency of Crop Production? New Insights from Rural Areas

Fossil fuel and electricity-powered irrigation techniques boost the water availability expense and increase greenhouse gas emissions. Especially in developing countries, solar-powered irrigation is becoming more popular as a response to the growing energy and environmental issues associated with agriculture systems. The existing study used data from 1080 wheat farmers in Balochistan, Pakistan, to investigate the impact of solar-powered irrigation system (SPIS) usage on the technical efficiency (TE) of wheat production. The TE of wheat production is estimated using a stochastic frontier production function, and the potential self-selectivity bias is addressed using an endogenous switching regression model. The findings indicated that 13.7% of the wheat cultivators assessed used SPISs to produce their crops. Using an endogenous switching regression model shows that SPIS usage increases the TE of wheat growers by 6.657%, after controlling for self-selection bias. While using SPISs, wheat farmers with large farms and farming familiarity had stronger positive effects on TE. The results highlight the need for more investigation and research into evidence-based good practice for SPIS solutions at the site level to ensure that the rollout of modern equipment not only drives the energy sector forward but also contributes significantly to our level playing field and sustainable environment.

Social safety nets and productivity outcomes: Evidence and implications for Bangladeshi rice growers

AbstractUsing national representative cross‐sectional data from 8846 rice growing plots in Bangladesh, we analyze the impact of social safety net programs (SSNPs) on rice farmers' productivity and efficiency. This study applied the propensity score matching (PSM) approach to correct the possible self‐selection biases arising from observed and unobserved factors affecting a household's SSNP participation decisions. The stochastic frontier production function is estimated separately for participants and non‐participants to compare yield and technical efficiency. Our results show that the output elasticities of all inputs except land and fertilizer are significantly higher for non‐participants than participants. The SSNP participants are estimated to have 1.95% higher technical efficiency than the non‐participants, while their frontier yield is 11.75% higher. The average treatment effect on treated (ATET) also confirms the yield and efficiency‐enhancing role of SSNPs, particularly in climate‐stressed areas. The study argues for widening the SSNP coverage to increase the marginal farmers' efficiency in climate‐vulnerable areas. Other policy interventions include policies to increase farmers' access to land through the proper functioning land market, education, providing literacy training, and different production inputs.

Factor Accumulation, Total Factor Productivity, Random Shocks and Output Growth in Cameroon

The main focus of this paper is to examine the proper channels through which the Cameroon economy can achieve a high output (GDP) growth rate and sustain it over time in order to accelerate her pace of economic recovery. Specifically, the paper attempts to understand the role of the various determinants of GDP and to investigate the role of random shocks (RNDSH) in GDP growth in the Cameroon economy from 1970 to 2015. A maximum likelihood technique (MLT) is used to estimate a trans log stochastic frontier production function in a one stage estimation procedure. The results reveal that GDP growth in the Cameroon economy is promoted by labour and capital, which jointly contribute 68% (47% for labour and roughly 22% for capital) against -22% for total factor productivity (TFP). The results also show that RNDSH impedes the GDP growth of the country at an annual average rate of 9.1% throughout the study period. These results imply that the Cameroon economy needs to focus on labour intensive techniques of production so as to propel GDP growth. This study recommends that more efforts should be invested in human capital development, reduction of inefficiency in production processes, and design of proper mechanisms to minimise the effects of Random shocks in the economy.

ANALYSIS OF THE INFLUENCE OF PRODUCTION FACTORS ON THE PRODUCTION OF CASSAVA FARMING BUSINESS IN SALATIGA CITY

Cassava farming in Salatiga City is a food-crop commodity farming business that has good opportunities because the demand for cassava in the market is increasing. However, some obstacles hinder cassava farming, namely cassava productivity which has not reached the target and limited production factors. This indicates that the use of production factors is still not efficient. Production factors that directly affect the productivity of cassava are land area, seeds, fertilizers, and labor. The aims of this study were: (1) to analyze the influence of production factors on cassava production, (2) to analyze the level of elasticity of cassava production factors, and (3) to analyze the level of technical efficiency and economic efficiency in cassava farming activities in Salatiga City. The analytical method used is the Cobb-Douglas production function with thehelp of the SPSS program to examine the influence of factors on cassava production and production elasticity. Technical efficiency is analyzed using the stochastic frontier production function. The results showed that the factors of seeds, manure, and labor were thought to affect cassava farming. The results of the elasticity analysis of all factors of production are in the rational area (Region II) with a positive value. The results of the technical efficiency analysis show that only the seed variable has a positive and significant value. Based on the results of the calculation of economic efficiency analysis, it shows that the input use of the land area, seeds, manure, and labor is not efficient.

Effects of Aging on Labor-Intensive Crop Production from the Perspectives of Landform and Life Cycle Labor Supply: Evidence from Chinese Apple Growers

The aging of the agricultural labor force is an irreversible trend that has become an important issue in China’s economic transformation. Previous studies on the effects of an aging population in developing countries on agriculture mainly focused on food crops, and the conclusions were mixed. Using data for apple growers in Shaanxi Province, China, we used ordinary least squares (OLS), stochastic frontier production function (SFA), and truncated regression to investigate how rural aging affects apple production under different landform conditions. We provided evidence that (i) aging leads apple growers to use hired labor to replace family labor in the flatlands, but not in mountainous and hilly areas, due to landform constraints on the factor substitution; (ii) aging has no significant impact on mechanical inputs in either the plains or the mountains, indicating that machinery cannot effectively replace the labor force; (iii) limited by a shortage of labor quantity and quality, apple growers respond to aging by reducing agricultural inputs in mountainous and hilly areas; (iv) changes in input structure cause aging to have little influence on yield and technical efficiency in flatlands, while aging significantly reduces yield in mountainous and hilly areas; (v) there is a nonlinear relationship between aging and technical efficiency and yield; and (vi) because the overall mechanization level of China’s apple industry is low, mechanical substitution for labor is not common in apple production.

Comparative Analysis of Contract Farming Effect on Technical Efficiency of Broiler Chicken Farms in Indonesia

The development of broiler chicken farms in Indonesia has taken two forms, namely non-contract and contract farming. This study aimed to compare the technical efficiency levels of production in these two types of farming in Banten Province, Indonesia. Data were collected randomly from 180 broiler chicken farmers, consisting of 103 non-contract and 77 contract farmers. The study used the stochastic frontier production function to meet its objectives. The results showed that non-contract broiler chicken farmers were less efficient in their production than those under contract. The mean technical efficiency of the production factor for non-contract broiler chicken farmers was 0.689, ranging from 0.339 to 0.996. On the contrary, broiler chicken farmers under contract had a higher mean efficiency value of 0.893, ranging from 0.638 to 0.988. Moreover, the type of input supplier had a significant positive effect on technical inefficiency in non-contract farms. Non-contract farmers who purchased their production needs from a poultry shop showed higher technical efficiency compared to those who used distributors. This research sheds light on the efficiency of broiler chicken farms, both non-contract and contract, enabling all stakeholders, including the government, to devise appropriate policies for the development of broiler chicken farming. The study provided valuable insights into the technical efficiency levels of broiler chicken farming in Indonesia, which can help farmers identify areas that need improvement and develop strategies to increase productivity and profitability.

The Impact of Government Food Policy on Farm Efficiency of Beneficiary Small-Scale Farmers in Indonesia

Enhancing self-sufficiency and national food security have been strategic policy goals of the Indonesian government. From 2015 to 2019, a food policy program called Upsus Pajale had been implemented to provide input subsidies and extension assistants to farmers for three strategic commodities: rice, maize, and soybeans, to accelerate productivity and increase production. The study was done by interviewing 374 beneficiary farmers. The objectives were to explore production efficiency and the farmers’ perspectives on the policy programs. By conducting stochastic frontier production function estimation, the results show that the mean efficiency level was 0.866. This study revealed that land size, seed cost, and labor cost were found to be important determinants of technical efficiency. In addition, the results of the inefficiency model indicated that age and farmers’ associations had a significant and positive effect on efficiency scores, whereas education had a negative effect. Contrarily, none of the policy program instruments appear to be essential determinants of efficiency. Furthermore, the research found that farmers prioritized their habits and profitability when deciding which crop to cultivate and that pests were their main concerns. Hence, the government should focus on enhancing research and development for improved seedling pest management control and encourage the establishment of farmers’ association to share experience and transfer information and technology for farmers to improve their efficiency.

DETERMINANT FACTORS OF TECHNICAL EFFICIENCY IN YAM PRODUCTION IN MORO LGA, KWARA STATE, NIGERIA

This paper investigates the determinants factors of technical efficiency using the stochastic frontier production function which incorporates the inefficiency model. A sample of 150 yam farmers were randomly selected from 17 wards of Moro LGA in Kwara State, Nigeria. Data was collected from the respondents with the aid of a structured interview schedule. The empirical result showed that land size, fertilizer, seedling, and use of herbicides were the main factors determining technical efficiency while age, experience, household size and contact with extension agent were the main determinants of the technical inefficiency of yam farmers. The mean technical efficiency was 0.636 which means that 36.4% of the technical output was not achieved. The result also indicates that land size, fertilizer, seedling, and herbicides are significant in yam production. And a significant relationship between age, household size, extension contact and years of experience and the output of the yam producers as it influences their technical efficiencies. The study concludes that land size, fertilizer, seedling, and use of herbicides were the main factors determining technical efficiency while age, experience, household size and contact with extension agent were the main the main determinants of inefficiency and thus recommends youths be encouraged to form cooperative organization and into yam production with attractive incentives like easy access to farm inputs, cooperate financing, easy exposure to markets.

Do outsourcing services provided by agricultural cooperatives affect technical efficiency? Insights from tobacco farmers in China

AbstractIn this study, we assess whether household outsourcing production tasks provided by tobacco cooperatives affect household technical efficiency, using the survey data from 449 households in Guizhou Province, China in 2014. The one‐step estimation of the stochastic frontier production function is employed. We also use the instrumental variable approach to address the potential selection biases that may arise from unobserved factors that are correlated with both outsourcing service adoption and technical efficiency. The empirical results show that the farmers’ decision to outsource agricultural services provided by cooperatives has a positive effect on technical efficiency. The effects of outsourcing on technical efficiency are highly heterogeneous at different production stages. It is also interesting to note that the magnitudes of outsourcing effects on technical efficiency are similar between labor‐intensive services and technology‐intensive services.

Income, Risks, Economic Efficiency of Rice Business and Economic Sustainability for Rice Farmers in Sambas District

The purpose of this research to appraise the income of rice farming, to set the risk of rice production, examine the degrees of efficiency of rice farming and economic sustainability for rice farmers in Sambas Regency. The primary data used in the research was obtained using a structured questionnaire administered to 60 selected farmers. R / C ratio, coefficient of variation, and the stochastic frontier production function were used to analyze the data. The results exhibited that rice farming in Sambas Regency was profitable with income reaching Rp. 7,696,442/ha. The degree of risk faced by farmers is moderate, which is 0.5. The average levels of technical, allocative, and economic efficiency of rice farming in Sambas District were 0.811, 0.986, and 0.80. This result exhibits that paddy farmers can increase their technical efficiency and allocative efficiency to achieve economically efficient conditions. Efforts to increase higher economic efficiency can be carried out by increasing the use of management as well as improving the level of input allocation used by paying attention to input prices to achieve a minimum cost level.

Technical efficiency of cassava farmers in Ekiti State, Nigeria

This study measured the technical efficiency of cassava farmers in Ekiti State, Nigeria. A multi-stage sampling technique was employed to select 120 respondents for the study. Primary data were collected from the randomly selected respondents through a well-structured and self-administered questionnaire. The results of the study indicated that more than half (52.5%) of the cassava farmers were older than 50 years of age and had household sizes within the range of 6-10 persons. About 51.6 percent of the respondents had more than a primary school education. No difference existed between those with tertiary education and those without formal education regarding the cultivated farm size (4.00 ha). Combined labour (family and hired labour) was prevalent among the farmers, as submitted by 65.8 percent of the cassava farmers. Results from the Stochastic Frontier Production Function (SFPF) model indicated that herbicide and pesticide, depreciation value of tools, cost of fertiliser used, and farm size significantly differed from zero and were important in cassava production. Also, the year of formal education, farming experience and marital status were the major socioeconomic characteristics affecting the technical inefficiency of the cassava farmers. Essentially, the technical efficiency of cassava farmers ranges between 0.334 and 0.972, with a mean value of 0.790. This shows that, on average, farmers could obtain about 80% of potential output from a given set of inputs. For technical efficiency to be improved in the study area, the year of formal education and farming experience should be considered by policymakers.

Impact of Socioeconomic Characteristics and Productivity on Output of Okra Farmers in Ikwerre Local Government Area, Rivers State, Nigeria

This study investigates the impact of socioeconomic characteristics and productivity on output of Okra farmers in Ikwerre Local Government Area, Rivers State. The objectives of this study were to examine the socio-economic characteristics of the respondents in the study area, investigate how productivity improve the output of okra farmers in the study area, and identify the problems associated with Okra production in Ikwerre Local government area of Rivers state and examine how profitability of Okra farmers enhance production of small-scale farmers in Ikwerre LGA. The population of the study is 2989 registered okra farmers in Ikwerre Local Government Area. Data were collected from 149 respondents drawn from the study area using multi-stage sampling stage techniques.Data were analyzed using descriptive statistics such as frequencies, percentages, mean scores (four-point Likert scale), stochastic frontier production function, Gross margin and multiple regressions. The results from the analysis (gross margin) revealed that the total variable cost at N8, 530.130 and total revenue at N11, 520,000 gave a gross margin of N2, 989,870 and a rate of return of N1.35k. this implies that, Okra farming is profitable in the study area

EFISIENSI TEKNIS USAHATANI PISANG CAVENDISH MENGGUNAKAN STOCHASTIC FRONTIER ANALYSIS (SFA) DI KABUPATEN BOJONEGORO

This study uses stochastic frontier analysis (SFA) to evaluate the efficacy of Cavendish banana cultivation technology in Bojonegoro Regency. An opinion survey of 16 Cavendish banana farmers spread across seven sub-districts in Bojonegoro Regency provides primary data. Farmers' technical productivity and the variables that affect it are assessed using SFA analysis. Based on the findings, Cavendish banana producers in Bojonegoro Regency have an average technical productivity of 80.8%. The stochastic frontier production function model includes the seven variables shown in table 1 and hypothesized to have an impact on output levels: land area, seeds, chemical fertilizers, organic fertilizers, labor, and capital. Large areas of land, organic fertilizers and pesticides are all elements that have a significant impact on the effectiveness of farmer technology. While age, education level, and number of family members are variables that affect inefficiency. The variable level of education is an element that has quite a large influence on technological inefficiency. The findings of this study are expected to educate relevant stakeholders and increase the effectiveness of the technology for the Cavendish banana industry in Bojonegoro Regency.

DETERMINANTS OF LEVEL OF ECONOMIC EFFICIENCY OF RICE PRODUCERS IN ANAMBRA STATE, NIGERIA

This study examined determinants and level of economic efficiency of rice production in Anambra State, Nigeria. The specific objectives were to: estimate the level of economic efficiency attained by rice farmers in the area; ascertain the determinants of level of economic efficiency attained by the farmers and assess the nature of returns to scale of rice production in the study area. Two hypotheses tested were: there is no significant difference between the levels of economic efficiency attained by farmers in the selected agricultural zones and socio-economic characteristics of the rice farmers do not significantly influence their economic efficiency level. Primary data were used for the study and Multistage, purposive and random sampling methods were used select 378 respondents. The collated data were analyzed by means of descriptive and inferential statistical tools such as Ordinary Least Squares (OLS) regression, Cobb Douglas Stochastic Frontier Production function and Scheffe’s Multiple Comparison test. Findings indicated a minimum economic efficiency score of 0.86, maximum of 
 0.99 and mean of 0.95 for rice farmers in the study area. Scheffe’s Multiple Comparison test indicated significant difference between means of economic efficiency scores and per hectare profits of farmers from paired agricultural zones. Maximun Likelihood Estimation of the Cobb Douglas stochastic frontier production regression showed that the production factors of land, labour and other inputs significantly and positively influenced economic efficiency level of the farmers. Inefficiency effect was significantly and negatively affected by educational level and amount of credit obtained; significantly and positively affected by farming experience while extension visit and farm size were not significant. Returns to scale figures were 1.32, 1.25, 1.15 and 1.12 for Anambra, Aguata and Awka Agricultural zones, and the State (pooled data) respectively. This implies increasing returns to scale across the Agricultural zones and the study area. It is recommended that Government should ensure adequate budgetary allocations to the institutions responsible for making cheap loans available to farmers while the institutions should maintain timely disbursement of the funds.

DO CLUSTER FARMING PRACTICES IMPROVE PROFITABILITY AND PRODUCTIVITY INDICES OF SMALLHOLDER RICE FARMERS? EVIDENCE FROM BORNO STATE, NIGERIA

The study examined the comparative analysis of technical efficiency of cluster and non-cluster rice farming in Borno state, Nigeria. Primary data were collected through structured questionnaire administered to 232 farmers comprising of 93 clustering and 139 non-clustering rice farmers in Borno State, Nigeria. Data were subjected to analytical techniques that included descriptive statistics, gross margin, t-test and stochastic frontier production function (SFPF). Cluster rice farming enterprise per hectare was more profitable by producing a gross margin (GM) of 196,020.62/ha thus returning N1.72 on every N1.00 invested as compared to non-cluster farming which produced a GM of 99,619.32/ha and thus had a return of N0.96 on every N1.00 invested. The SFPF revealed an average technical efficiency (TE) of 0.76 for cluster farming was higher than 0.58 for non-cluster farmers. Hence, cluster rice farming was more technically efficient compared to non-cluster rice farming. The determining factors of TE in cluster farming include seed (-0.49), fertilizer (0.242), agro-chemicals (0.341) and labour (0.747) compared to non-cluster which included fertilizer (0.207), agro-chemicals (-0.291) and labour (0.668). Inefficiency variables were insignificant in cluster farming while household members active in farming (0.811), years of farming experience (-0.226), and amount of credit utilized (0.5e-4) were statistically significant in non-cluster farming. Insecurity, pest infestation and shortage of water were critical production constraints faced by cluster farmers compared to non-cluster farmers faced with constraints such as shortage of water, insecurity and flooding. Non-clustering farmers should adopt production cluster farming to boost their profit, increase their efficiency and take advantage of the enormous services attributed to working in groups.

Which Scale Is Appropriate for the Sustainable Management of Paddy Field?—A Case Study of Jiaxing, China

This article aims to explore the appropriate scale for the cultivation of paddy field and its influencing factors in Jiaxing. The stochastic frontier production function and binary logit method were used to calculate the appropriate scale. The results showed: (1) The appropriate management scale of the paddy field in Jiaxing is 10–30 ha. (2) The farmers’ willingness to cultivate paddy field on a large scale was positively correlated with land quality, and their number of years engaged in agriculture. (3) It was negatively correlated with the difficulty of obtaining a loan and the age of the farmers. This research proposed that the government should continue to support the appropriate scale management of paddy field, and promote agricultural modernisation. At the same time, the government should also attach importance to promoting the role of science and technology in agriculture by actively training new generations of professional farmers, promoting land transfer, and implementing the subsidy policy for larger-scale cultivation to create a good environment for farmers to work on an appropriate scale.

TECHNICAL EFFICIENCY OF YAM PRODUCTION IN PAIKORO LOCAL GOVERNMENT AREA OF NIGER STATE, NIGERIA

The study examined technical efficiency of yam farmers in Paikoro Local Government Area of Niger State, Nigeria was analyzed using the stochastic frontier production model. Data were collected from 90 yam farmers selected using simple random sampling technique. The data were collected with the aid of structured questionnaire and oral interview were analyzed using Descriptive statistics, stochastic frontier production function. The maximum likelihood estimate (MLE) of the stochastic frontier model production function revealed that the inputs were under-utilized the results of the socio-economic characteristics shows that yam farmers was dominated 50% by male farmers, within the range of 46- 55 years, 47% of the farmers had farm size less-than 1 hectare with at least 10 years’ experience. The technical efficiency of farmers differs substantially among the respondents, ranging between 0.325 and 0.952 with a mean economic efficiency of 0.807.

TECHNICAL EFFICIENCY OF BAMBARA NUT PRODUCTION IN NIGER STATE, NIGERIA

There is a gap between actual and potential output of Bambara nut due to inefficient use of existing resources, thereby hindering profit maximization. Therefore, this study aims at determining the technical efficiency of Bambara nut production in Niger State, Nigeria. Multistage sampling technique was used to randomly select 150 representatives of Bambara nut producers in the study area. Primary data were obtained using structured interview schedule. Stochastic frontier production function was used to analyze the data collected. Results showed that four out of the five variables included in the efficiency model, namely: farm size, seed, labour and herbicide were statistically and positively significant at 1%, 10%, 10% and 10% respectively. Fertilizer was not significant. Similarly, the factors affecting Bambara nut production in the study area as shown by the inefficiency model were age, education and farming experience. In addition, the mean efficiency of the respondents was 0.71. The study concluded that Bambara nut production in the study area was efficient. However, there are prospects of increasing production efficiency by 29% using existing inputs and technologies. It was therefore concluded that Bambara nut farmers in the study area should be encouraged to join existing cooperatives or form new ones so as to benefit from various incentives such as economies of scale, access to formal credit facilities, linkage with product buyers, among others. In addition, they should engage in rotational communal labour.