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Access to Markets and Farm Efficiency: A Study of Rice Farms in the Bicol Region, Philippines

  • Sanjaya DeSilva
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    This paper presents an empirical investigation of the relationship between the spread, spatially and temporally, of market institutions and improvements in the productivity and efficiency of farmers. The data used in this study were collected over two decades in a sample of rice farms in the Bicol Region of the Philippines. Our estimates reveal a significant inverse relationship between distance from the market and farm productivity and efficiency in 1983. While there are substantial improvements in yields, unit costs, and efficiency in the two decades that followed, the gains are larger in the more remote and sparsely populated villages. This finding suggests that the relationship between remoteness and farm outcomes has weakened over time. We also find that the development of markets in the peripheral villages and the improved connectivity between the peripheral villages and market centers are facilitated by population growth, infrastructural investments (specifically, irrigation and roads), and the availability of agricultural extension programs.

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    File URL: http://www.levyinstitute.org/pubs/wp_687.pdf
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    Paper provided by Levy Economics Institute in its series Economics Working Paper Archive with number wp_687.

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    Date of creation: Sep 2011
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    Handle: RePEc:lev:wrkpap:wp_687
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    1. Evenson, R.E. & Kimhi, A. & DeSilva, S., 2000. "Supervision and Transaction Costs: Evidence from Rice Farms in Bicol, the Philippines," Papers 814, Yale - Economic Growth Center.
    2. Anderson, Jock R. & Feder, Gershon, 2007. "Agricultural Extension," Handbook of Agricultural Economics, Elsevier.
    3. Hoff, Karla, 2008. "Joseph E. Stiglitz," Policy Research Working Paper Series 4478, The World Bank.
    4. Larson, Donald F. & Plessmann, Frank, 2009. "Do farmers choose to be inefficient? Evidence from Bicol," Journal of Development Economics, Elsevier, vol. 90(1), pages 24-32, September.
    5. Bravo-Ureta, Boris E. & Evenson, Robert E., 1994. "Efficiency in agricultural production: the case of peasant farmers in eastern Paraguay," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 10(1), January.
    6. Otsuka, Keijiro & Chuma, Hiroyuki & Hayami, Yujiro, 1992. "Land and Labor Contracts in Agrarian Economies: Theories and Facts," Journal of Economic Literature, American Economic Association, vol. 30(4), pages 1965-2018, December.
    7. Lovell, C.A.K., 1993. "Linear Programming Approaches to the Measurement and Analysis of Productive Efficiency," Papers 393e, Georgia - College of Business Administration, Department of Economics.
    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. Sanjaya DeSilva & Robert E. Evenson & Ayal Kimhi, 2006. "Labor Supervision and Institutional Conditions: Evidence from Bicol Rice Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 851-865.
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