IDEAS home Printed from https://ideas.repec.org/a/ags/sieaea/334701.html
   My bibliography  Save this article

Enhancing Technical Efficiency and Economic Welfare: A Case Study of Smallholder Potato Farming in the Western Highlands of Guatemala

Author

Listed:
  • Widanage, Rupananda
  • Chan, Catherine
  • Tsanga, Yin-Phan
  • Sipes, Brent
  • Melakeberhan, Haddish
  • Sanchez-Perez, Amílcar
  • Mejía-Coroy, Alfredo

Abstract

Smallholder farmers in the Western Highlands of Guatemala grow potatoes for subsistence and as a cash crop but their current productivity is 29% lower than the world average. The objective of this study is to provide policy recommendations for improving potato productivity through enhancing technical efficiency in smallholder potato farming in the Western Highlands of Guatemala. In doing so, this study examines the determinants of potato productivity and identifies the sources of technical inefficiency in smallholder potato farming. In addition, the study evaluates the economic welfare impact of potato farm operations and provides policy recommendations for increasing smallholder potato productivity through enhancing technical efficiency. Stochastic production frontier analysis showed that on average farmers are at 57% efficiency. Hence, there is a considerable room for improving efficiency in potato farming. The sources of inefficiency of the farmers were determined to be caused by higher elevation, smaller farm size, and location of the farms. Welfare gains from reaching potential efficiency is US$ 8.79 million in terms of producer surplus per year in Guatemala. Hence, this study provides valuable information for policy makers and farmers for improving technical efficiency and producer surplus. Likewise, providing better conservation practices by extension will ameliorate the low productivity associated with higher elevation and locations that are lower in technical efficiency.

Suggested Citation

  • Widanage, Rupananda & Chan, Catherine & Tsanga, Yin-Phan & Sipes, Brent & Melakeberhan, Haddish & Sanchez-Perez, Amílcar & Mejía-Coroy, Alfredo, 2022. "Enhancing Technical Efficiency and Economic Welfare: A Case Study of Smallholder Potato Farming in the Western Highlands of Guatemala," Economia agro-alimentare / Food Economy, Italian Society of Agri-food Economics/Società Italiana di Economia Agro-Alimentare (SIEA), vol. 24(1), February.
    • Handle: RePEc:ags:sieaea:334701
    DOI: 10.22004/ag.econ.334701
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/334701/files/EAA_2022_Chan.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.334701?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Neumann, Kathleen & Verburg, Peter H. & Stehfest, Elke & Müller, Christoph, 2010. "The yield gap of global grain production: A spatial analysis," Agricultural Systems, Elsevier, vol. 103(5), pages 316-326, June.
    2. Subal C. Kumbhakar, 1994. "Efficiency estimation in a profit maximising model using flexible production function," Agricultural Economics, International Association of Agricultural Economists, vol. 10(2), pages 143-152, April.
    3. Wu, Wenbin & Yu, Qiangyi & You, Liangzhi & Chen, Kevin & Tang, Huajun & Liu, Jianguo, 2018. "Global cropping intensity gaps: Increasing food production without cropland expansion," Land Use Policy, Elsevier, vol. 76(C), pages 515-525.
    4. Catherine Chan & Brent Sipes & Abouzeid Ayman & Xu Zhang & Patricia LaPorte & Fellipe Fernandes & Aliza Pradhan & Jacqueline Chan-Dentoni & Pravat Roul, 2017. "Efficiency of Conservation Agriculture Production Systems for Smallholders in Rain-Fed Uplands of India: A Transformative Approach to Food Security," Land, MDPI, vol. 6(3), pages 1-12, August.
    5. Kalirajan, K P, 1990. "On Measuring Economic Efficiency," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 5(1), pages 75-85, January-M.
    6. Hiroyuki Takeshima, 2019. "Geography of plant breeding systems, agroclimatic similarity, and agricultural productivity: evidence from Nigeria," Agricultural Economics, International Association of Agricultural Economists, vol. 50(1), pages 67-78, January.
    7. Kodde, David A & Palm, Franz C, 1986. "Wald Criteria for Jointly Testing Equality and Inequality Restriction s," Econometrica, Econometric Society, vol. 54(5), pages 1243-1248, September.
    8. Sain, Gustavo & Loboguerrero, Ana María & Corner-Dolloff, Caitlin & Lizarazo, Miguel & Nowak, Andreea & Martínez-Barón, Deissy & Andrieu, Nadine, 2017. "Costs and benefits of climate-smart agriculture: The case of the Dry Corridor in Guatemala," Agricultural Systems, Elsevier, vol. 151(C), pages 163-173.
    9. K. Kalirajan, 1981. "An Econometric Analysis of Yield Variability in Paddy Production," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 29(3), pages 283-294, November.
    10. Battese, George E., 1992. "Frontier production functions and technical efficiency: a survey of empirical applications in agricultural economics," Agricultural Economics, Blackwell, vol. 7(3-4), pages 185-208, October.
    11. Thiam, Abdourahmane & Bravo-Ureta, Boris E. & Rivas, Teodoro E., 2001. "Technical efficiency in developing country agriculture: a meta-analysis," Agricultural Economics, Blackwell, vol. 25(2-3), pages 235-243, September.
    12. 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 325-332.
    13. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rupananda Widanage & Catherine Chan & Yin-Phan Tsang & Brent Sipes & Haddish Melakeberhan & Am?lcar Sanchez-Perez & Alfredo Mej?a-Coroy, 2022. "Enhancing Technical Efficiency and Economic Welfare: A Case Study of Smallholder Potato Farming in the Western Highlands of Guatemala," Economia agro-alimentare, FrancoAngeli Editore, vol. 24(1), pages 1-25.
    2. repec:ags:bdbjaf:258303 is not listed on IDEAS
    3. Asefa, Shumet, 2011. "Analysis of technical efficiency of crop producing smallholder farmers in Tigray,Ethiopia," MPRA Paper 40461, University Library of Munich, Germany, revised 19 Sep 2012.
    4. Tim J. Coelli, 1995. "Recent Developments In Frontier Modelling And Efficiency Measurement," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 39(3), pages 219-245, December.
    5. Abdul Wadud, 2013. "Impact of Microcredit on Agricultural Farm Performance and Food Security in Bangladesh," Working Papers 14, Institute of Microfinance (InM).
    6. Villano, Renato A. & Fleming, Euan M., 2004. "Analysis of Technical Efficiency in a Rainfed Lowland Rice Environment in Central Luzon Philippines Using a Stochastic Frontier Production Function with a Heteroskedastic Error Structure," Working Papers 12906, University of New England, School of Economics.
    7. Gebregziabher, Gebrehaweria & Namara, Regassa E. & Holden, Stein, 2012. "Technical Efficiency of Irrigated and Rain-Fed Smallholder Agriculture in Tigray, Ethiopia: A Comparative Stochastic Frontier Production Function Analysis," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 51(3), pages 1-24, August.
    8. Renato Villano & Euan Fleming, 2006. "Technical Inefficiency and Production Risk in Rice Farming: Evidence from Central Luzon Philippines," Asian Economic Journal, East Asian Economic Association, vol. 20(1), pages 29-46, March.
    9. Dhehibi, Boubaker & Lachaal, Lassaad & Elloumi, Mohamed & Messaoud, Emna B., 2007. "Measurement and Sources of Technical Inefficiency in the Tunisian Citrus Growing Sector," 103rd Seminar, April 23-25, 2007, Barcelona, Spain 9391, European Association of Agricultural Economists.
    10. Puig-Junoy, Jaume & Argiles, Josep M., 2004. "The influence of management accounting use on farm inefficiency," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 5(2), pages 1-20, August.
    11. Bravo-Ureta, Boris E. & Pinheiro, Antonio E., 1993. "Efficiency Analysis Of Developing Country Agriculture: A Review Of The Frontier Function Literature," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 22(1), pages 1-14, April.
    12. Wollni, Meike & Brümmer, Bernhard, 2012. "Productive efficiency of specialty and conventional coffee farmers in Costa Rica: Accounting for technological heterogeneity and self-selection," Food Policy, Elsevier, vol. 37(1), pages 67-76.
    13. Lachaal, Lassaad & Chebil, Ali & Dhehibi, Boubaker, 2004. "A Panel Data Approach to the Measurement of Technical Efficiency and its Determinants: Some Evidence from the Tunisian Agro-Food Industry," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 5(1), pages 1-9, January.
    14. Uvarovsky, Vladimir & Voigt, Peter, 2000. "Russia's agriculture: eight years in transition - convergence or divergence of regional efficiency," IAMO Discussion Papers 31, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
    15. Thiam, Abdourahmane & Bravo-Ureta, Boris E. & Rivas, Teodoro E., 2001. "Technical efficiency in developing country agriculture: a meta-analysis," Agricultural Economics, Blackwell, vol. 25(2-3), pages 235-243, September.
    16. Wasantha Athukorala & Clevo Wilson, 2012. "Groundwater overuse and farm-level technical inefficiency: evidence from Sri Lanka," School of Economics and Finance Discussion Papers and Working Papers Series 279, School of Economics and Finance, Queensland University of Technology.
    17. Boris Bravo-Ureta & Daniel Solís & Víctor Moreira López & José Maripani & Abdourahmane Thiam & Teodoro Rivas, 2007. "Technical efficiency in farming: a meta-regression analysis," Journal of Productivity Analysis, Springer, vol. 27(1), pages 57-72, February.
    18. Imori, Denise & Guilhoto, Joaquim José Martins & Postali, Fernando Antonio Slaibe, 2012. "Eficiência técnica das agropecuárias familiar e patronal – diferenças regionais no Brasil [Technical efficiency of agricultural households and business - regional differences in Brazil]," MPRA Paper 46954, University Library of Munich, Germany.
    19. Imori, Denise & Guilhoto, Joaquim José Martins & Postali, Fernando Antonio Slaibe, 2012. "Production efficiency of family farms and business farms in the Brazilian regions," MPRA Paper 46995, University Library of Munich, Germany.
    20. Madau, Fabio A., 2005. "Technical Efficiency in Organic Farming: An Application on Italian Cereal Farms Using a Parametric Approach," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24545, European Association of Agricultural Economists.
    21. Alene, Arega D. & Hassan, Rashid M., 2003. "Measuring The Impact Of Ethiopia'S New Extension Program On The Productive Efficiency Of Farmers," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25919, International Association of Agricultural Economists.

    More about this item

    Keywords

    Crop Production/Industries;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:sieaea:334701. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/sieaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.