Economic efficiency and total factor productivity growth: the case of rice farming in Mekong Delta, Vietnam
2013
Dang, N.H.
The study determined the factors that influenced technical, allocative, economic and profit efficiencies of rice farmers in Mekong Delta, Vietnam for the period 2008-2011 using Stochastic Frontier Analysis. In addition, total factor productivity (TFP) growth was decomposed into technical change, scale efficiency change, and change in technical efficiency (TE). The results revealed that the average technical, allocative, economic and profit efficiencies were 89.1%, 75.1%, 67.6%, and 78.3%, respectively. Significant factors that we found to affect rice output per farm are, nitrogen fertilizer, phosphate fertilizer, labor, variety, and soil index while significant determinants of TIE were farming experience, tenancy rate, credit access, training, and membership in farmers' organization/cooperative. Moreover, the significant factors that we found to influence economic efficiency were experience, farmsize, tenancy rate, credit and training. The factors that were found to significantly affect farm profit were prices of seeds, fertilizer, pesticide, wage, tractor service rate, and land area while significant determinants of PIE were education, experience, farmsize, tenancy rate, training, membership, and distance of the input market from the farm. TFP growth was found to be positive at approximately 8.67% during the period 2008-2011, or 2.82%/year. The positive growth in TFP was driven by technological progress (9%) while scale efficiency and TE changes were miniscule and negative (-0.04% and -0.49% respectively).
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