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Technical and Environmental efficiencies and Best Management Practices in Agriculture

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  • Tamini, Lota D.
  • Larue, Bruno

Abstract

An input distance function (IDF) is estimated to empirically evaluate and analyze the technical and environmental efficiencies of 210 farms located in the Chaudière watershed (Quebec), where water quality problems are particularly acute because of the production of undesirable outputs that are jointly produced with agricultural products. The true IDF is approximated by a flexible translog functional form estimated using a full information maximum likelihood method. Technical and environmental efficiencies are disaggregated across farms and account for spatial variations. Our results show that there is a significant correlation between technical and environmental efficiencies. The IDF is used to compute the cumulative Malmquist productivity index and the Fisher index. The two indices are used to measure changes in technology, profitability, efficiency, and productivity in response to the adoption of 2 selected best management practices (BMPs) whose objective is to reduce water pollution. We found significant differences across BMPs regarding the direction and the magnitude of their effect on profitability, efficiency and productivity.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 18964.

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Date of creation: Jul 2009
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Handle: RePEc:pra:mprapa:18964

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Keywords: Environmental efficiency; distance function; phosphorus runoff; productivity; profitability; technical efficiency.;

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