Yield gaps, economic inefficiency and potential for productivity growth of rice farms in China

Results of the study found that yield dominated rice production growth over the past five decades. The increase in yield has been the sole source of rice production growth in China since the 1980s. The estimates of stochastic frontier model showed that rice production in the study area was characterized as constant returns to scale. As a scarce resource, land had positively the greatest impact on rice production. Thus, it is more important to keep rice sown area stable. It was found that fertilizer and labor still have a significantly positive impact on rice production, although output elasticities were very small. It implies that output of rice will increase if farmers increase fertilizer or labor use. However, at the present level of input and output prices, increasing fertilizer or labor use may mean a loss in profit. The average technical efficiency reached by rice farmers in the study area was 87%, ranging from 36.8 to 98.5%. It implies that there existed a technical inefficiency of 13%, which dominated the variation in rice yield over random error. The average allocative efficiency was 80% with a coefficient of variation of 13.9%. As a whole, rice farmers achieved an average economic efficiency of 70.2%, meaning that there existed about 30% economic inefficiency. The results of the study showed that education, farming experience, and farm size had a positive effect on economic efficiency, while rice for sale (mainly to the government) and number of plots had negative effects. It was found that rice yield was higher in the economically less developed region than in the developed region. Hybrid rice was found to have about 97% yield advantage over conventional rice, but technical efficiency of hybrid rice was a little lower than that of conventional rice. Science and technology were found to have a significant and positive impact on rice yield through agricultural research and extension. It was also found that grain cropping intensity and double rice cropping system had a negative effect on rice yield. Overall, the results suggest the existence of some gaps in rice yield, which may be reduced through policy interventions