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Efficiency in agricultural production: The case of peasant farmers in eastern Paraguay

  • Bravo-Ureta, Boris E.
  • Evenson, Robert E.

This paper contributes to the productivity literature in developing country agriculture by quantifying the level of efficiency for a sample of peasant farmers from Eastern Paraguay. A stochastic efficiency decomposition methodology is used to derive technical, allocative and economic efficiency measures separately for cotton and cassava. An average economic efficiency of 40.1% for cotton and of 52.3% for cassava is found, which suggests considerable room for productivity gains for the farms in the sample through better use of available resources given the state of technology. Gains in output through productivity growth have become increasingly important to Paraguay as the opportunities to bring additional virgin lands into cultivation have significantly diminished in recent years. No clear strategy to improve farm productivity could be gleaned from an examination of the relationship between efficiency and various socioeconomic variables. One possible explanation for this finding is the existence of a stage of development threshold below which there is no consistent relationship between socioeconomic variables and productivity. If this is the case, then our results suggest that this sample of Paraguayan peasants are yet to reach such a threshold. Hence, improvements in educational and extension services, for example, would be needed to go beyond this threshold. Once this is accomplished, additional productivity gains would be obtained by further investments in human capital and related factors.

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Article provided by Blackwell in its journal Agricultural Economics.

Volume (Year): 10 (1994)
Issue (Month): 1 (January)
Pages: 27-37

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Handle: RePEc:eee:agecon:v:10:y:1994:i:1:p:27-37
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  15. Battese, George E. & Coelli, Tim J. & Colby, T.C., 1989. "Estimation of Frontier Production Functions and the Efficiencies of Indian Farms Using Panel Data from ICRISAT's Village Level Studies," 1989 Conference (33rd), February 7-9, 1989, Christchurch, New Zealand 144383, Australian Agricultural and Resource Economics Society.
  16. Forsund, Finn R. & Lovell, C. A. Knox & Schmidt, Peter, 1980. "A survey of frontier production functions and of their relationship to efficiency measurement," Journal of Econometrics, Elsevier, vol. 13(1), pages 5-25, May.
  17. Lipton, Michael, 1985. "Education and Farm Efficiency: Comment," Economic Development and Cultural Change, University of Chicago Press, vol. 34(1), pages 167-68, October.
  18. 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), April.
  19. Ray, Subhash C., 1988. "Data envelopment analysis, nondiscretionary inputs and efficiency: an alternative interpretation," Socio-Economic Planning Sciences, Elsevier, vol. 22(4), pages 167-176.
  20. Taylor, Timothy G. & Scott Shonkwiler, J., 1986. "Alternative stochastic specifications of the frontier production function in the analysis of agricultural credit programs and technical efficiency," Journal of Development Economics, Elsevier, vol. 21(1), pages 149-160, April.
  21. 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.
  22. Moock, Peter R, 1981. "Education and Technical Efficiency in Small-Farm Production," Economic Development and Cultural Change, University of Chicago Press, vol. 29(4), pages 723-39, July.
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