Journal of Food, Agriculture and Environment

Efficiency and its determinant factors for smallholder farms in the Grain for Green Program on the Loess Plateau, China

Author(s):

Li Li ^1*, Atsushi Tsunekawa ¹, Mitsuru Tsubo ¹, Atsushi Koike ², Jijun Wang ³

Recieved Date: 2010-07-16, Accepted Date: 2010-10-25

Abstract:

A nonparametric frontier approach, data envelopment analysis, was used to calculate technical, pure technical, cost, allocative and scale efficiencies of 112 farms participating in the Grain for Green Program on the Loess Plateau in China. The results indicate substantial cost inefficiencies. The main source of cost inefficiency was allocative inefficiency although considerable technical inefficiency also exists. Technical inefficiency resulted slightly more from scale inefficiency than from pure technical inefficiency. Scale inefficiency was mostly due to the suboptimal scale of farms. Regression analysis of explanatory variables against technical efficiency, allocative efficiency and scale efficiency suggested that LG_Agri (indicator for farm size) was the only variable that was significantly related to all three efficiency indices. Other significant variables include Remittance Ratio (indicator for rural-urban migration), Tenancy Ratio (indicator for land tenancy) and Simpson Index (indicator for land fragmentation). Our findings prompt policy suggestions that would facilitate labor mobility, provide more secure land tenure and increase land consolidation, while avoiding further withdrawal of cultivated land unless explicit measures to alleviate the potential impact on production efficiency are followed.

Keywords:

Semi-arid region, technical efficiency, allocative efficiency, scale efficiency, farm size, land tenure, land fragmentation, labor mobility

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Journal: Journal of Food, Agriculture and Environment
Year: 2010
Volume: 8
Issue: 3&4
Category: Agriculture
Pages: 772-778

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