Comparing technical efficiency of organic and conventional coffee farms in rural hill region of Nepal using data envelopment analysis (DEA) approach
2015
Poudel, K. L. | Johnson, Thomas G. | Yamamoto, Naoyuki | Gautam, Shriniwas | Mishra, Bhawani
The data envelopment analysis (DEA) approach was used to estimate technical efficiency scores which were then regressed against farm specific characters using Tobit regression. Primary data were collected from a random sample of 240 organic and conventional coffee famers (120 from each type). Mean technical efficiency scores were 0.89 and 0.83 for organic and conventional coffee farming, respectively. Scores for farms operating under constant return to scale (CRS), decreasing return to scale (DRS) and increasing return to scale (IRS) were 31.67, 3.83, and 37.5 %, respectively, for organic coffee and 29.17, 25, and 45.83 %, respectively, in conventional farming areas. These scale characteristics define a production set that is closed and convex with property of strong disposability. Tobit regression showed that the variation in technical efficiency was related to education, farm experience and training/extension services, and access to credit. Farmers would reconsider the rationing of input and learn from technically efficient farm practices. Policy implications will rest on production planning strategies. The objective of this study was to estimate the technical efficiency of both types of farming and evaluating the factors affecting farm inefficiency of each farming category of coffee in rural region of Nepal.
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