Author: Jovita Laura M. Abara

Publisher:

Published: 2007

Total Pages: 166

ISBN-13:

The main concern of the world today is food security, the need to feed an increasing population. This means increasing the food supply in each country by improving agricultural efficiency and productivity. Agricultural productivity can be increased primarily thru technological change, improved input use efficiency and conserving the resource base of the country (FA02005). The study compares the efficiency and productivity growth of the agricultural sector of fifteen countries in Asia over the time period 1985 to 2002. To achieve this, two methods were used, the non-parametic DEA approach and the parametic SFA method. First, The total factor productivity growth is estimated and decomposed using the DEA Malmquist Productivity Index and then the input and output slacks affecting the technical efficiency as well as technical inefficiency is estimated using four SFA models: Aggregate Production without time variable(Model 1A), Improved Aggregate Production with time(Model 1B), Crop Production(Model 2) and livestock production(Model 3). The result of two DEA models indicate that the average annual total factor productivity index growth of 2.5 percent of 15 Asian countries was largely due to the positive technological change of 2.6 percent despite the low level of technical efficiency change of 0.2 percent. Malaysia has the highest TFP growth index due to technological advancements as verified. Lao, PDR, Mongolia and Sri Lanka incurred zero input and output slacks, and are therefore, considered very efficient and are peers to the other countries for 1985 and 2002. Results of the study indicate that in general, the translog stochastic frontier model is the best representation of the data for the four SFA models. Majority of the input resources are found to have a significant effect on production efficiency. Machinery is insignificant in crop (Model 2), livestock (Model 3) and the improved aggregate production models (Models 1-A and 1B); land in livestock production and fertilizer in the improved aggregate production model. The findings of the study also show that there is technical inefficiency effect in the frontier model. Irrigated land and fertilizer as z-variables show a statistically significant effect on its technical inefficency. Results imply that irrigation has a positive effect on its technical inefficiency and fertilizer has a negative effect on technical inefficiency. Inthe improved aggregate production model irrigated land, fertilizer and time show an insignificant effect on technical inefficiency. The study highlighted the modeling of agricultural production efficiency extensively using four separate stochastic frontier models for the first time in the Asian region. The study also modeled agricultural efficiency by using two extensive DEA models: Malmquist and Multi-stage.