Social behavior and technical efficiency of rice production, Bohol, Philippines

This study investigated the social behaviour and technical efficiency and rainfed and irrigated rice production in Bohol, Philippines. Previous studies have dealt on technical efficiency based on the socio-economic characteristics of farm households, whereas other focused not only on the latter but also on human capital. At present, however, no studies so far have incorporated social capital particularly altruism as a key determinant of technical efficiency, therefore the conduct of this study. Stochastic production frontier was utilized to estimate the technical efficiency scores of rice production. Tobit regression was used to investigate the determinants of farm technical efficiency. These factors were grouped into three: (1) socio-demograhic and farm economic characteristic and institutional factors, (2) educational attainment as a measure of human capital, and (3) altruism as measure of social capital. In rainfed farms, planted area/farm size, female ratio and amount of remittances received significantly influenced technical efficiency. On the other hand, farm size, total value of assets, location of farmers along the turn-out service area (TSA) and access to credit were the significant variable affecting farm technical efficiency in irrigated farms. When education was included in the first model, number of significant variables increased in the rainfed farms. Access of farmers to agricultural credit also showed to have a significant effect on technical efficiency. Further findings revealed that educational attainment had significant negative effects. Since majority of farmers were males, as the years spent in school is increased, males are likely to have spent less time in the field and they may even develop negative attitudes toward farming. Hence, decreases efficiency. On the contrary, human capital was found to have a positive effect in irrigated farms. Furthermore, coefficients of the significant variables in the previous model increased indicating increased on efficiency. In the irrigated system, farmers are aware of the benefits associated with better water access, hence they are able to adopt better technologies for farming. Altruism was used as a measure of social capital. It showed no significant result on technical efficiency in the rainfed farms. It may be due to the fact that rainfed farmers do not share a common good, hence there is no incentive for social cooperation. However, when social capital was included, majority of the coefficients of the other factors increased which translates to higher efficiency. On the other hand, results revealed that social capital variables positively influenced technical efficiency in irrigated farms and it was found significant. Altruism foster norms of individuals and general reciprocity, thus discourages opportunistic behaviour. Since, farmers are benefitting from the irrigation system, they have to cooperate to maintain the system for it to be effective. Further findings showed that human capital and social capital should be considered as complements that reinforce each other's effect.