Natural resources such as soil and water are essential to agriculture, especially in arid and semi-arid rain-fed areas, yet the impacts of managing these crucial natural resources on farm technical efficiency are little known. Using data from 400 households with 1031 plots, we examined the impacts of soil and water conservation measures (SWCMs) on the technical efficiency of farmers in the semi-arid Bundelkhand (central India). We estimated stochastic production frontiers, considering potential self-selection bias stemming from both observable and unobservable factors in the adoption of SWCMs at the farm level. The farm technical efficiency for adopters of SWCMs ranged from 0.68 to 0.72, and that for non-adopters ranged from 0.52 to 0.65, depending on how biases were controlled for. As the average efficiency is consistently higher for adopter farmers than the control group, promoting SWCMs could help to increase input use efficiency, especially in resource-deprived rain-fed systems in the semi-arid tropics.

We examined the effect of using input and output quantities as compared with costs and revenues when estimating farm-level efficiency scores and ranking. We used farm-level data from the 2015 Ethiopia Rural Socioeconomic Survey (ERSS) where production inputs and outputs in quantities as well as monetary units could be distinguished. Average technical efficiency scores of 72.2% and 68.6%, respectively, were found for analysis based on quantities and on costs and revenues. Efficiency ranking differed significantly. Results suggest that type of data compilation introduces bias to the efficiency assessment and that conclusions may be unclear, which complicates policy advice.

This study assessed the impact of improved green fodder production activities on technical efficiency (TE) of dairy farmers in climate vulnerable landscapes of central India. We estimated stochastic production frontiers, considering potential self-selection bias stemming from both observable and unobservable factors in adoption of fodder interventions at farm level. The empirical results show that TE for treated group ranges from 0.55 to 0.59 and that for control ranges from 0.41 to 0.48, depending on how biases are controlled. Additionally, the efficiency levels of both adopters and non-adopters would be underestimated if the selectivity bias is not appropriately accounted. As the average TE is consistently higher for adopter farmers than the control group, promoting improved fodder cultivation would increase input use efficiency, especially in resource-deprived small holder dairy farmers in the semi-arid tropics.

Over the past three decades, the cereal subsector in Ghana has contributed immensely to food security in the country. However, limited evidence exists on the production performance of this subsector, particularly in terms of heterogeneities across agro-ecological zones. This paper analyzes the production technology and performance of the cereal subsector in Ghana using a nationally representative data set from 26,449 cereal farms and the meta-stochastic frontier approach. The empirical results suggest that the estimated factor inputs contribute substantially to cereal output, with land and seed exerting the highest impacts across all agro-ecological zones. The evidence further shows that the agro-ecology of cereal farms plays a crucial role in the performance of the subsector. The mean technical efficiency estimates strongly suggest that cereal farms in all agro-ecologies exhibit some degrees of production inefficiency. The findings further reveal total output from the meta-frontier to be much superior to those generated by cereal farms in all agro-ecologies of Ghana, indicating the existence of opportunities for cereal output gains in all agro-ecologies. We find heterogeneities in farm management practices and production technology across the various crops and agro-ecological zones to be relevant sources for cereal productivity growth in Ghana.

This paper assesses the influence of heat and drought stress on the economic performance of the European dairy sector. Climatic data from the Gridded Agro-Meteorological data in Europe were combined with dairy enterprise data from the Farm Accountancy Data Network, resulting in a data set of 4412 farms in 22 European Union (EU) countries over the period 2007–2013. Since the performance of dairy farms is influenced by the context in which they operate, farms were grouped into areas representing similar climatic conditions through the use of a latent class analysis. Technical efficiency (TE) and economic downside risk were used as performance indicators against which the effect of climatic stress factors was evaluated. TE was estimated using a ‘true-fixed’ effect stochastic frontier model. Economic downside risk was based on gross margin deviations. Regression analysis suggests a significant negative effect of drought and heat stress on both TE and the downside gross margin difference in most climatic classes, with few exceptions. Results imply that both drought and heat stress-related issues need to be considered when designing adaptation strategies to address threats to the economic performance of the EU dairy sector.

We utilize a unique primary data set of farms in Russia and Kazakhstan to investigate the link between policy reforms and technical efficiency. These countries have heavily subsidized their domestic agricultural production over the last decade, with a total of around USD 76 billion USD and USD 11.5 billion USD in government funding directed towards the agricultural sectors in Russia and Kazakhstan, respectively. Results of a stochastic frontier analysis make evident that variable inputs, such as fertilizer, have a relatively large influence on wheat production compared to land. Nearly every fifth farm has a technical efficiency level lower than 60%, suggesting significant unrealized production potential. While our analysis shows a negative relation between subsidies and efficiency, other factors, such as farmer’s education, cooperative and agroholding membership, and participation in insurance programs, are positively related to farm efficiency. The results imply that the governments and policymakers could mobilize the unutilized wheat production potential by improving the farmer education system, fostering cooperation among farms, and developing functioning farm insurance schemes.

To improve the national average yield of potato in Ethiopia, which is very low as compared to its potential, factors that influence technical efficiency of potato production need to be determined. Therefore, the objective of this study was to investigate the determinants of technical efficiency using a cross-sectional data collected from 368 randomly selected potato producers in Northern Ethiopia using a multi-stage sampling technique. The study employed Cobb–Douglas stochastic frontier model to get farm-level technical efficiency scores. Tobit model and principal component analysis were used to determine the factors that influence technical efficiency of farm households. The results revealed that chemical fertiliser, seed potato, plot size and labour are statistically significant factors that affect potato yield. The average technical efficiency score was estimated to be 75%; and education, experience, off-farm income, household size, membership in a farmers’ association, use of irrigation water, extension contact, use of improved seed, access to product market and weak coordination of stakeholders’ were significant factors influencing technical efficiency. The findings of the study suggest that there is a need for government intervention to create strong market linkage between producers and buyers and to give appropriate training to agricultural extension agents.

The impact of greenhouse gas (GHG) reduction on the efficiency of Alberta’s dairy industry is assessed through a technical efficiency analysis over the period 1996–2016, with and without emissions included as a “bad” output. Environmentally adjusted technical efficiency and technical efficiency estimates are highly correlated; thus, reducing GHG emissions may not result in decreased efficiency. Increased milk per cow, a southern Alberta location, and increased use of forage are associated with greater environmentally adjusted technical efficiency. The opportunity cost of foregone milk revenue associated with reduced emissions is Can$308.29 per metric ton of GHG. The results imply possible policy strategies to reduce emissions.

China’s small-scale agricultural producers face many challenges to increasing productivity and efficiency. In recent years, the Chinese government has provided support for farmer professional cooperatives (FPCs) to connect small farms with upstream and downstream processes in the food supply chain. This study combines propensity score matching and sample selection-corrected stochastic production frontier analysis to estimate the impacts of FPC participation by greenhouse vegetable producers on technical efficiency and income. Results indicate that FPCs help participants improve returns to scale and marginal returns to land and labor, increase technical efficiency, and obtain ¥4,460 (18%) greater income per greenhouse than nonparticipants.

This article estimates technical and environmental efficiencies using the stochastic frontier analysis with panel data of twenty-two main apple production provinces in China during 1992–2014. Results show that the environmental efficiency for pesticide input alone has lower mean value of 0.337 than environmental efficiency for the two environmentally detrimental inputs, pesticide and chemical fertilizer, which is 0.782. Furthermore, all efficiency scores have decreasing trends over time. Loess Plateau is more environmentally efficient than the Bohai bay region. Results of output elasticities show that chemical fertilizer has a mean value of 0.225, which is higher than for material, labor, and pesticide input. Also, apple production in China experiences decreasing returns to scale. Finally, it is also discovered that labor and chemical fertilizer have a substitute relationship, while material and labor have a complementary relationship, as do chemical fertilizer and pesticide. The results from the study should prove useful for reallocating input resources and improving environmental efficiency.

The Great Plains is the most important wheat producing region in the United States. Dwindling returns and changes in government farm programs have reduced wheat acreage, raising concerns over its future viability. Small farms and marginal areas are particularly vulnerable, including the western Great Plains (WGP). To assess the technical and economic viability of wheat farms, the efficiency of 141 wheat farms in the WGP was estimated. Results found substantial inefficiency among all producer types. The largest source of inefficiency was input use among smaller farms. The smaller farms were the most scale efficient, reducing concerns over their future viability.

A stochastic production frontier approach was used to estimate input distance functions for U.S. grass-fed beef (GFB) production. Average technical efficiencies of 0.84 and 0.79 were found for U.S. GFB whole farms and enterprises, respectively. Producer education level, experience, farm size, annual net farm income from the GFB operation, annual net household income from off-farm sources, and regional differences are the efficiency drivers of U.S. GFB farms. Increasing returns to scale were found for U.S. GFB farms. Our results suggest that U.S. GFB farms can be scale efficient if the optimal size of the operation is greater than approximately 100 GFB animals.

In recent years, the growth in local food marketing channels has been significant. Most of the research in this field examining the economic implication of these trends has focused post-farmgate including supply chain analysis (e.g., Hardesty et al., 2014; King et al., 2010), regional economic impacts (e.g., Brown et al., 2014; Hughes et al., 2008; Jablonski et al., 2016) and consumer values and motivations that have driven demand (e.g., Costanigro, 2014; Lusk and Briggeman, 2009). To date, with the exception of a few case studies examining expenses and sales by channel assessment (LeRoux et al., 2010; Hardesty and Leff, 2010; Jablonski and Schmit, 2016) there has been little research that examines the impact on financial viability among farms selling through these markets. The goal of this paper is twofold: first, to identify the factors that have the greatest influence on the efficiency of farmers and ranchers that participate in local food systems, and second, to estimate the relationship between marketing strategy and farm financial efficiency, with a particular focus on variations across farm size. Our estimation of the stochastic production frontier suggests that scale, production enterprise specialty, market outlet choices, land ownership, and management of expenses have the greatest influence on producer financial efficiency. Our model suggests that scale has the largest impact on financial efficiency, providing evidence that, all else constant, the most important factor in the efficiency of direct market producers is scale. When profit is defined as operating profit, results indicate that marketing channel is not an important indicator of efficiency. But when profit is defined as return on assets, marketing channel is an important indicator of efficiency, albeit less than is scale. Results from this analysis indicate there are economies of scale associated with farms and ranches that sell through local and regional markets, and that scale rather than marketing channel has the largest influence on efficiency.

U.S. dairy production has been consolidating into large-scale confinement operations. Large numbers of small- to medium-scale dairies have disappeared in the last two decades, and many more are disappearing. This article analyzes small- to medium-scale dairy operations in Maryland during 1995–2009 for changes in technology and efficiency through a novel two-stage DEA approach to examine productivity changes. Conventional confinement dairy operations and management-intensive grazing dairies are analyzed separately. The results show that both dairy systems have become more productive on the technological frontiers, yet the rate of technical change for graziers was less than half the rate for confinement.

Agricultural policymakers place increasing emphasis on developing efficiency measures for organic producers in order to evaluate regulatory strategies and evolving organic market conditions. We develop technical efficiency measures for U. S. organic farmers using a stochastic production frontier. Farm decisions about acquiring and managing organic soil materials from on-farm and local sources are incorporated into the technical efficiency measure. Productivity differences between newer entrants to organic farming and more experienced producers are estimated in order to isolate the impact of learning and management expertise on farm-level technical efficiency.

The main objective of this research is to compare estimates of technical efficiency obtained from the stochastic frontier approach for two samples of farmers of private and water user associations in the Nefzaoua Oases region (Tunisia), which are characterized by a severe scarcity of water and especially a high degree of salinity. Technical inefficiency effects are modeled as a function of farm-specific socioeconomic factors. Results suggest that both systems are technically inefficient. On average, the private system is found to be slightly more efficient than the associative one. Date yield could be explained mainly by four variables: water quantity applied per palm tree, labor per palm tree, phosphate per palm tree, and water salinity. Output elasticities of all inputs are found to be positive and significant except for the farmyard manure. Water salinity has a considerable negative impact on date productivity. For the technical inefficiency model, none of the socioeconomic variables seem to matter.

In Finland, expanding dairy farms often face the problem of additional fields being geographically distant and only available as small parcels. We develop a stochastic production frontier model to estimate the technical efficiency of Finnish dairy farms and simulate the effect of parcel distance and parcel size on the efficiency of an average farm for 2000 through 2009. The overall development of technical efficiency is positive during the study period but increases in distance and decreases in parcel size both significantly reduce farm efficiency. Therefore, efforts to improve the parcel structure are justified.

Technical efficiency for cotton growers is examined using both stochastic (SFA) and nonstochastic (DEA) production function approaches. The empirical application uses farm-level data from four counties in west Texas. While efficiency scores for the individual farms differed between SFA and DEA, the mean efficiency scores are invariant of the method of estimation under the assumption of constant returns to scale. On average, irrigated farms are 80% and nonirrigated farms are 70% efficient. Findings show that in Texas, the irrigated farms, on average, could reduce their expenditures on other inputs by 10%, and the nonirrigated farms could reduce their expenditures on machinery and labor by 12% and 13%, respectively, while producing the same level of output.

Recent investigations have provided mixed assessments of farm firm efficiency. This analysis examined the efficiency of a homogeneous sample of central Illinois grain farms over a six-year period. A best-practice frontier was constructed using the ray-homothetic function, which allowed optimal farm output to vary with factor intensity. Efficiency measures were found to increase with temporal aggregation. The ray-homothetic approach was found to attribute high scale inefficiencies to larger sample farms in cases where the factor shares did not vary appreciably across farms. The findings suggest that policy recommendations regarding farm efficiency must be made with care.

Meat goat enterprise efficiency was estimated using an input distance function (IDF) by applying stochastic production frontier techniques for the southeastern U.S. region. We found increasing returns to scale and scope economies for southeastern U.S. meat goat enterprises. Mean technical efficiency was 0.81. Our results suggest southeastern U.S. meat goat enterprises can be scale efficient if their size of operation is >~60 goats or >40 breeding does. Cost and IDF analyses show input expenses decreased substantially with increasing scale of operations in southeastern U.S. meat goat production. Empirical Monte Carlo simulation techniques show consistency of small-sample properties for the IDF.