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Environmental Production Factors and Efficiency of Smallholder Agricultural Households: Using Non‐parametric Conditional Frontier Methods

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  • Birhanu A. Adamie
  • Tomas Balezentis
  • Mette Asmild

Abstract

External environmental factors play a significant role in the agricultural production of smallholder farmers. This is especially the case in developing countries where production is less technologically intensive. These factors are mainly exogenous and affect both the farmers’ input choices and the final output levels. However, previous studies of technical efficiency of smallholder agricultural production either ignore these factors or assume separability between environmental factors and input choice, which is often not the case in developing counties. Using data on smallholder farmers in Ethiopia, we relax this separability assumption and investigate the importance of external environmental factors in farmers’ performance and efficiency variation across regions. The empirical analysis is based on a non‐parametric conditional order‐m estimation method that relaxes some of the traditional strong assumptions in efficiency modeling and, more importantly, the separability between environmental factors and the choice of physical inputs. Using data from four major agricultural regions of Ethiopia, we show the extent that environmental factors contribute to the technical efficiency and the significance of environmental factors in farmers’ performance.

Suggested Citation

  • Birhanu A. Adamie & Tomas Balezentis & Mette Asmild, 2019. "Environmental Production Factors and Efficiency of Smallholder Agricultural Households: Using Non‐parametric Conditional Frontier Methods," Journal of Agricultural Economics, Wiley Blackwell, vol. 70(2), pages 471-487, June.
  • Handle: RePEc:bla:jageco:v:70:y:2019:i:2:p:471-487
    DOI: 10.1111/1477-9552.12308
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    Cited by:

    1. S. C. West & A. W. Mugera & R. S. Kingwell, 2022. "The choice of efficiency benchmarking metric in evaluating firm productivity and viability," Journal of Productivity Analysis, Springer, vol. 57(2), pages 193-211, April.
    2. Carlucci, Fabio & Corcione, Carlo & Mazzocchi, Paolo & Trincone, Barbara, 2021. "The role of logistics in promoting Italian agribusiness: The Belt and Road Initiative case study," Land Use Policy, Elsevier, vol. 108(C).
    3. Adamie, Birhanu Addisu, 2021. "Land property rights and household take-up of development programs: Evidence from land certification program in Ethiopia," World Development, Elsevier, vol. 147(C).
    4. Raoul Akanro & Abraham Amoussouga Gero & Marie Odile Attanasso, 2022. "Estimation and determinants of technical efficiency of smallholder cashew (anacardium) farmers in Dassa district, Benin: a bootstrap data envelopment approach," SN Business & Economics, Springer, vol. 2(12), pages 1-17, December.

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