IDEAS home Printed from https://ideas.repec.org/p/ias/fpaper/04-wp364.html
   My bibliography  Save this paper

Do Macroeconomic Shocks Impact the Economic Efficiency of Small Farmers? The Case of Wetland Rice Farmers in Indonesia

Author

Abstract

This study examines the impact of macroeconomic shocks on the efficiency of small farmers. We estimate single- and multiple-factor efficiency measures for Indonesian rice farmers in years before, during, and after the country's macroeconomic crisis. We find that productive efficiency declined by 7 to 22 percent during the crisis, largely because of a decline in technical efficiency and a relatively large volatility in efficiency (the coefficient of variation was larger by a factor of 1.87). Allocative efficiency, on the other hand, increased slightly and offset part of the decrease in technical efficiency. The magnitude of the impact on efficiency depended on farmers' input adjustments. Factors associated with higher levels of technical and allocative efficiency include larger-size farms and higher education levels for the farm owners. The predicted efficiency measures disaggregated by type (technical and allocative), by specific factor (fertilizer and labor), and by specific location (province and farm level) can be used in designing and targeting inter-ventions to improve the economic efficiency of farms.

Suggested Citation

  • Jacinto F. Fabiosa & Helen H. Jensen & Dong Yan, 2004. "Do Macroeconomic Shocks Impact the Economic Efficiency of Small Farmers? The Case of Wetland Rice Farmers in Indonesia," Food and Agricultural Policy Research Institute (FAPRI) Publications (archive only) 04-wp364, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    • Handle: RePEc:ias:fpaper:04-wp364
    as

    Download full text from publisher

    File URL: https://www.card.iastate.edu/products/publications/pdf/04wp364.pdf
    File Function: Full Text
    Download Restriction: no
    File URL: https://www.card.iastate.edu/products/publications/synopsis/?p=525
    File Function: Online Synopsis
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bravo-Ureta, Boris E. & Pinheiro, António E., 1993. "Efficiency Analysis of Developing Country Agriculture: A Review of the Frontier Function Literature," Agricultural and Resource Economics Review, Cambridge University Press, vol. 22(1), pages 88-101, April.
    2. Raymond J. Kopp, 1981. "The Measurement of Productive Efficiency: A Reconsideration," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 96(3), pages 477-503.
    3. 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.
    4. Schmidt, Peter & Knox Lovell, C. A., 1979. "Estimating technical and allocative inefficiency relative to stochastic production and cost frontiers," Journal of Econometrics, Elsevier, vol. 9(3), pages 343-366, February.
    5. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    6. 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.
    7. 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.
    8. 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.
    9. Kopp, Raymond J. & Diewert, W. Erwin, 1982. "The decomposition of frontier cost function deviations into measures of technical and allocative efficiency," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 319-331, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Haryanto, T. & Talib, B. A. & Salleh, N. H. M., 2016. "Technical Efficiency and Technology Gap in Indonesian Rice Farming," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 8(3), pages 1-10, September.

    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. Pantzios, Christos J. & Rozakis, Stelios & Tzouvelekas, Vangelis, 2006. "Evading Farm Support Reduction via Efficient Input Use: The Case of Greek Cotton Growers," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 38(3), pages 555-574, December.
    2. Resti, Andrea, 1997. "Evaluating the cost-efficiency of the Italian Banking System: What can be learned from the joint application of parametric and non-parametric techniques," Journal of Banking & Finance, Elsevier, vol. 21(2), pages 221-250, February.
    3. 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.
    4. Chebil, A. & Frija, A. & Bennouna, B., 2018. "Impact of water shortage on the competitiveness of agricultural commodities in Tunisia," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275874, International Association of Agricultural Economists.
    5. Abdul Wadud, 2013. "Impact of Microcredit on Agricultural Farm Performance and Food Security in Bangladesh," Working Papers 14, Institute of Microfinance (InM).
    6. Luis R. Murillo‐Zamorano, 2004. "Economic Efficiency and Frontier Techniques," Journal of Economic Surveys, Wiley Blackwell, vol. 18(1), pages 33-77, February.
    7. Chebil, Ali & Frija, Iheb & Bahri, Walid, 2014. "Irrigation water efficiency in wheat production in Chbika (Tunisia):Parametric versus Nonparametric Comparisons," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 15(1), pages 1-14.
    8. repec:ipg:wpaper:2014-464 is not listed on IDEAS
    9. Alene, Arega D. & Manyong, Victor M. & Gockowski, James, 2006. "The production efficiency of intercropping annual and perennial crops in southern Ethiopia: A comparison of distance functions and production frontiers," Agricultural Systems, Elsevier, vol. 91(1-2), pages 51-70, November.
    10. Coelli, Tim J. & Battese, George E., 1996. "Identification Of Factors Which Influence The Technical Inefficiency Of Indian Farmers," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 40(2), pages 1-26, August.
    11. Tzouvelekas, Vangelis & Pantzios, Christos J. & Fotopoulos, Christos, 2001. "Economic Efficiency in Organic Farming: Evidence from Cotton Farms in Viotia, Greece," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 33(1), pages 35-48, April.
    12. Phu Nguyen-Van & Nguyen To-The, 2016. "Technical efficiency and agricultural policy: evidence from the teaproduction in Vietnam," Review of Agricultural, Food and Environmental Studies, INRA Department of Economics, vol. 97(3), pages 173-184.
    13. Vangelis Tzouvelekas & Konstantinos Giannakas & Peter Midmore & Konstantinos Mattas, 1997. "Technical efficiency measures for olive-growing farms in Crete, Greece," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 3(2), pages 154-169, May.
    14. Sherlund, Shane M. & Barrett, Christopher B. & Adesina, Akinwumi A., 2002. "Smallholder technical efficiency controlling for environmental production conditions," Journal of Development Economics, Elsevier, vol. 69(1), pages 85-101, October.
    15. Phu Nguyen-Van & Nguyen To-The, 2014. "Agricultural extension and technical efficiency of tea production in northeastern Vietnam," Working Papers of BETA 2014-11, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    16. 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.
    17. Dhehibi, Boubaker & Telleria, Roberto & Aw-Hassan, Aden & Hatem Mohamed, Saad & Ziadat, Feras & Wu, Weicheng, 2015. "Impacts of Soil Salinity on the Productivity of Al-Musayyeb Small Farms in Iraq: An Examination of Technical, Economic, and Allocative, Efficiency," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 16(2), pages 1-14.
    18. Dhehibi, Boubaker & Bahri, Haithem & Annabi, Mohamed, 2012. "Input and output technical efficiency and total factor productivity of wheat production in Tunisia," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 7(1), pages 1-18, October.
    19. Godswill, M. & Namara, Regassa & Hagos, Fitsum & Awulachew, Seleshi Bekele & Ayana, M. & Awulachew Bossio, Deborah, 2011. "A comparative analysis of the technical efficiency of rain-fed and smallholder irrigation in Ethiopia," IWMI Working Papers H044123, International Water Management Institute.
    20. 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.
    21. Reddy, Mahendra, 2002. "Implication of Tenancy Status on Productivity and Efficiency: Evidence from Fiji," Sri Lankan Journal of Agricultural Economics, Sri Lanka Agricultural Economics Association (SAEA), vol. 4, pages 1-20.

    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:ias:fpaper:04-wp364. 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/faiasus.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.