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Romanian Maize - Distorted Prices and Producer Efficiency

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  • Sauer, Johannes
  • Balint, Borbala

Abstract

This research aims at shedding empirical light on the relative efficiency of small-scale maize producers in Romania. Farmers in transition countries still face heavily distorted price systems resulting from imperfect market conditions and socioeconomic and institutional constraints. To capture such distortions we formulate a stochastic shadow-cost frontier model to investigate the systematic input-specific allocative inefficiency. We further adjust the underlying cost frontier by incorporating shadow price corrections and subsequently reveal evidence on farm specific technical inefficiency. Different models are estimated due to the imposition of curvature correctness and the effects on the individual efficiency estimates are shown. The empirical results show a relative high technical efficiency of the small-scale farmers but relatively poor scores on systematic input price efficiency. The usage of extension services as well as agricultural training on the farm level are found to have a positive effect on the technical efficiency level of the farms. All model specifications further agree on the negative effect on efficiency with respect to the use of insecticides. The imposition of functional concavity on the shadow cost frontier leads to relative differences in the efficiency estimates of up to 240%.

Suggested Citation

  • Sauer, Johannes & Balint, Borbala, 2006. "Romanian Maize - Distorted Prices and Producer Efficiency," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25597, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae06:25597
    DOI: 10.22004/ag.econ.25597
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    References listed on IDEAS

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    1. Trzeciak-Duval, Alexandra, 1999. "A Decade of Transition in Central and Eastern European Agriculture," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 26(3), pages 283-304, August.
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