Examining the relationship between farm size and productive efficiency: a Bayesian directional distance function approach

Robertson R. B. Khataza, Atakelty Hailu, Graeme J. Doole, Marit E. Kragt, Arega D. Alene

Research output: Contribution to journalArticle

Abstract

Achieving sustainable food security and increased farm income will depend on how efficient production systems are in converting available inputs to produce outputs. Using data from Malawi, we estimate a Bayesian directional technology distance function to examine the relationship between farm size and technical efficiency. Our results support the existence of an inverse relationship between farm size and productive efficiency, where small farms are more efficient than large farms. On average, farms exhibit inefficiency levels of 60%, suggesting that productivity could be improved substantially. Improving productive efficiency and food security will require farms to operate in ways where the size of cultivated area is matched by nonland production inputs such as labor, fertilizer, and improved seeds. The results highlight the need for policies that could incentivize farmers to adopt productivity-enhancing technologies and, where possible, to allocate excess land to lease markets.

Original languageEnglish
Pages (from-to)237-246
Number of pages10
JournalAgricultural Economics
Volume50
Issue number2
DOIs
Publication statusPublished - Mar 2019

Cite this

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title = "Examining the relationship between farm size and productive efficiency: a Bayesian directional distance function approach",
abstract = "Achieving sustainable food security and increased farm income will depend on how efficient production systems are in converting available inputs to produce outputs. Using data from Malawi, we estimate a Bayesian directional technology distance function to examine the relationship between farm size and technical efficiency. Our results support the existence of an inverse relationship between farm size and productive efficiency, where small farms are more efficient than large farms. On average, farms exhibit inefficiency levels of 60{\%}, suggesting that productivity could be improved substantially. Improving productive efficiency and food security will require farms to operate in ways where the size of cultivated area is matched by nonland production inputs such as labor, fertilizer, and improved seeds. The results highlight the need for policies that could incentivize farmers to adopt productivity-enhancing technologies and, where possible, to allocate excess land to lease markets.",
keywords = "Inverse productivity, Technical efficiency, Africa, Parametric distance function, TECHNICAL EFFICIENCY, PLOT SIZE, SUSTAINABLE INTENSIFICATION, CONSERVATION AGRICULTURE, MALAWI, INPUT, SCALE, INEFFICIENCY, PREFERENCES, ECONOMIES",
author = "Khataza, {Robertson R. B.} and Atakelty Hailu and Doole, {Graeme J.} and Kragt, {Marit E.} and Alene, {Arega D.}",
year = "2019",
month = "3",
doi = "10.1111/agec.12480",
language = "English",
volume = "50",
pages = "237--246",
journal = "Agricultural Economics",
issn = "0169-5150",
publisher = "John Wiley & Sons",
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Examining the relationship between farm size and productive efficiency : a Bayesian directional distance function approach. / Khataza, Robertson R. B.; Hailu, Atakelty; Doole, Graeme J.; Kragt, Marit E.; Alene, Arega D.

In: Agricultural Economics, Vol. 50, No. 2, 03.2019, p. 237-246.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Examining the relationship between farm size and productive efficiency

T2 - a Bayesian directional distance function approach

AU - Khataza, Robertson R. B.

AU - Hailu, Atakelty

AU - Doole, Graeme J.

AU - Kragt, Marit E.

AU - Alene, Arega D.

PY - 2019/3

Y1 - 2019/3

N2 - Achieving sustainable food security and increased farm income will depend on how efficient production systems are in converting available inputs to produce outputs. Using data from Malawi, we estimate a Bayesian directional technology distance function to examine the relationship between farm size and technical efficiency. Our results support the existence of an inverse relationship between farm size and productive efficiency, where small farms are more efficient than large farms. On average, farms exhibit inefficiency levels of 60%, suggesting that productivity could be improved substantially. Improving productive efficiency and food security will require farms to operate in ways where the size of cultivated area is matched by nonland production inputs such as labor, fertilizer, and improved seeds. The results highlight the need for policies that could incentivize farmers to adopt productivity-enhancing technologies and, where possible, to allocate excess land to lease markets.

AB - Achieving sustainable food security and increased farm income will depend on how efficient production systems are in converting available inputs to produce outputs. Using data from Malawi, we estimate a Bayesian directional technology distance function to examine the relationship between farm size and technical efficiency. Our results support the existence of an inverse relationship between farm size and productive efficiency, where small farms are more efficient than large farms. On average, farms exhibit inefficiency levels of 60%, suggesting that productivity could be improved substantially. Improving productive efficiency and food security will require farms to operate in ways where the size of cultivated area is matched by nonland production inputs such as labor, fertilizer, and improved seeds. The results highlight the need for policies that could incentivize farmers to adopt productivity-enhancing technologies and, where possible, to allocate excess land to lease markets.

KW - Inverse productivity

KW - Technical efficiency

KW - Africa

KW - Parametric distance function

KW - TECHNICAL EFFICIENCY

KW - PLOT SIZE

KW - SUSTAINABLE INTENSIFICATION

KW - CONSERVATION AGRICULTURE

KW - MALAWI

KW - INPUT

KW - SCALE

KW - INEFFICIENCY

KW - PREFERENCES

KW - ECONOMIES

U2 - 10.1111/agec.12480

DO - 10.1111/agec.12480

M3 - Article

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SP - 237

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JO - Agricultural Economics

JF - Agricultural Economics

SN - 0169-5150

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ER -