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Input, Output Technical Efficiencies and Total Factor Productivity of Cereal Production in Tunisia

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  • Dhehibi, Boubaker
  • Bahri, Haithem
  • Annabi, Mohamed
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    Abstract

    In this paper, farm level technical efficiency of production and its determinants are investigated in a sample of 51 cereal producing farms located in the main cereal production region in Tunisia using a stochastic frontier production model. Empirical findings show that labor input factor appears with a minimal effect on the production. The hypothesis of constant returns to scale is rejected at the 5% level of significance, and returns to scale were found to be decreasing. Moreover, the estimated coefficients in the technical inefficiency model are also as expected. The estimated coefficients of the instruction level of farmer and the rotation, technical variable, are negatives and statistically significant at 5% level, which indicates their positive effect on technical efficiency. In addition, results indicated that estimated technical efficiency of cereal production in the sample varied widely, ranging from 52.63% to 94.62, with a mean value of 77%. This suggests that, on average, cereal producing farmers could increase their production by as much as 23% through more efficient use of production inputs. On a second step, Timmer and Kopp indexes of technical inefficiency were estimated for the same farms using a Cobb–Douglas frontier production function with a composite error term, and a developed relationship between these two indices. Results show that the mean values of the Timmer and Kopp TE indices were over 0.80, but one half of the farms were below 0.80 for the Timmer index and below 0.83 for the Kopp index. The level of inefficiency was found to be related to farm size: small and large farms were shown to be more technically efficient than medium-sized farms. With the given inputs, the production of cereals could be increased by 20% on average through making all farms 100% efficient. Alternatively, inputs could be reduced by 17% on average to produce the same amount of cereal output. Finally, the lower level of efficiency but higher yield and total factor productivity in the medium-sized farms means that more cereals can potentially be produced in these farms. The findings revealed that significant factors related to TFP were age, education level and the share of wheat crops into total cropped area. These results calls for policies aimed at provision of training programs, extensions services. In addition, the encouragement of experienced farmers by applying improved input management on these farms can be recommended alongside appropriate new technologies, especially for wheat farmers.

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    Bibliographic Info

    Paper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 122866.

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    Date of creation: 2012
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    Handle: RePEc:ags:iaae12:122866

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    Keywords: Technical efficiency; Timmer index; Kopp index; TFP; Cereal farms; Tunisia; Agricultural and Food Policy; Farm Management; Production Economics; Productivity Analysis; Research Methods/ Statistical Methods; C43; O47; Q12;

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    1. Fare, Rolf & Knox Lovell, C. A., 1978. "Measuring the technical efficiency of production," Journal of Economic Theory, Elsevier, vol. 19(1), pages 150-162, October.
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    7. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    8. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
    9. Reifschneider, David & Stevenson, Rodney, 1991. "Systematic Departures from the Frontier: A Framework for the Analysis of Firm Inefficiency," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 715-23, August.
    10. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
    11. Kumbhakar, Subal C & Ghosh, Soumendra & McGuckin, J Thomas, 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 279-86, July.
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