Research, Extension, and Information: Key Inputs in Agricultural Productivity Growth

The objective of this paper is to examine how economists have perceived the contributions of agriculture to the economic development process and then to present the case for the critical role that research, extension, and information can play in agricultural productivity growth and thus in economic development, particularly in low income countries. After a brief presentation of the framework commonly used to examine productivity growth, a distinction is made between technological change and technical efficiency. This distinction is crucial for policy purposes because the major impetus behind technological change are research and development, while education and experience are critical to improving managerial capabilities to make efficient use of a given technology. Empirical findings concerning the returns on agricultural research, with special attention to studies that have focused on Pakistan, are discussed. The paper then offers an overview of alternative methodologies available to measure technical efficiency, summarises the empirical literature, and finally focuses on studies dealing with Pakistani agriculture. Once it is established that improvements in technical efficiency could contribute significantly to increases in farm output and income, the discussion moves to some issues that have implications for the measurement and potential improvement of farm efficiency. An overview of a model of privatised extension services, currently being applied in some Latin American countries and which could have some relevance to conditions in Pakistan and elsewhere, is provided. The paper ends with the contention that significant improvements are needed in the collection and organisation of farm production data if we are to advance our understanding of the drivers of productivity growth at the farm level

RATES OF RETURN TO PRIVATE AGRICULTURAL EXTENSION: EVIDENCE FROM TWO FARM MANAGEMENT CENTERS IN EL SALVADOR

This paper evaluates the economic and the financial viability of implementing private farm management centers (FMC) in El Salvador. In doing so, an ex ante cost-benefit analysis is performed. The results of this analysis suggest that a combination of better farm prices (paid and received), reallocation of resources, and crop diversification that would be promoted by a FMC can lead to an increase in farm level profits that is sufficient to cover the operation of the center and to still generate net gains in household income.Farm Management,

A LINEAR PROGRAMMING ANALYSIS OF ECONOMIES OF SIZE AND PROFITABILITY IN VEGETABLE PRODUCTION

Crop Production/Industries,

THE EFFECT OF SOIL CONSERVATION ON TECHNICAL EFFICIENCY: EVIDENCE FROM CENTRAL AMERICA

This study evaluates technical efficiency (TE) levels for rural households under high and low levels of investments in soil conservation in El Salvador and Honduras. To correct for potential self-selectivity bias a household-level switching regression framework is implemented to estimate separate stochastic production frontiers for the two groups of households under analysis. The main results indicate that a systematic difference exists between the two studied groups. Specifically, households with higher levels of investments in soil conservation show higher average TE than those with a lower level of investments. Constrains in the rural land and credit markets appear to be the reason behind these differences. Our estimations indicate that for farms with lower levels of investments in soil conservation access to credit is a significant factor explaining the sources of inefficiency. Conversely, households with higher levels of investments in soil conservation present the highest partial output elasticity for land, the highest levels of TE and the smallest farms. This result could suggest the presence of a market failure in the land market which is denying access to land to the more efficient producers.Land Economics/Use,

FARM BENEFITS AND NATURAL RESOURCE PROJECTS IN HONDURAS AND EL SALVADOR

A model of conservation adoption, diversification and household income, including farm and off-farm sources was formalized, wherein households simultaneously allocate assets to different activities. The mapping of assets to household income through both off and on farm activities can conceptually be considered as a production process, with assets corresponding to factors of production and income as the output. Either adoption of conservation technologies and farm output diversification are influenced by participation in natural resource management programs. Therefore, these technological improvements should foster farm production and productivity and, consequently, should be reflected in a greater household income,. Finally, household income improvement is considered a necessary condition for sustainability of the changes introduced by the projects. Overall, the results indicate that the variables more directly reflecting land allocation, such as area with staples and cash crops, output diversification and conservation practices are associated with the greatest gains in household income. Output diversification significantly decreases income from staple crops and greatly increases cash crop income. These results reaffirm the strategic role of diversification in fighting rural poverty. However, gains stemming from a more diversified income portfolio do not occur without cost, since an extra item added to the farm plan implies a reduction in the production of corn and beans (staples). This trade-off between diversification and subsistence food production suggests that switching to a more market-oriented production pattern may increase household food insecurity.Consumer/Household Economics,

Soil conservation and technical efficiency among hillside farmers in Central America: a switching regression model

The main objective of this paper is to evaluate and analyse technical efficiency (TE) levels for hillside farmers under different levels of adoption of soil conservation in El Salvador and Honduras. A switching regression model is implemented to examine potential selectivity bias for high and low level adopters, and separate stochastic production frontiers, corrected for selectivity bias, are estimated for each group. The main results indicate that households with above-average adoption show statistically higher average TE than those with lower adoption. Households with higher adoption have smaller farms and display the highest partial output elasticity for land. Constraints in the land and credit markets are likely explanations for these differences. In addition, all estimated models show that TE has a positive and significant association with education and extension.Central America, soil conservation, stochastic frontiers, switching regression, technical efficiency, Resource /Energy Economics and Policy,

Technical Efficiency and Adoption of Soil Conservation in El Salvador and Honduras

A household-level switching regression model is implemented to examine potential selectivity bias for rural households under high and low levels of investments in soil conservation in El Salvador and Honduras. In the presence of selectivity bias, separate stochastic production frontiers are estimated for low and high adopters. The main results indicate that households with higher levels of investments in soil conservation show higher average TE than those with a lower level of investments. Constrains in the rural land and credit markets are likely explanations for these differences. The results also indicate that for farms with lower levels of investments in soil conservation access to credit is a significant factor explaining the sources of inefficiency. Conversely, households with higher levels of investments have the highest partial output elasticity for land, the highest levels of TE and the smallest farms. These results are consistent with the presence of a failure in the land market which would limit access to land to the more efficient producers.Stochastic Frontiers, Technical Efficiency, Switching Regression, Central America, Soil Conservation, Land Economics/Use, d24, q12, o13, c21,

A Meta-Analysis of Technical Efficiency in Farming: A Multi-Country Perspective

The objective of this study is to undertake a meta-analysis seeking to explain the variation in average technical efficiency focusing on the agricultural sector. For this purpose, a meta-analysis of 126 technical efficiency studies on the agricultural sector of developing and developed countries was undertaken. In addition, the study contributes to cross-country productivity literature because the existing body of work in this area typically uses aggregate (i.e., national) level data to estimate total factor productivity and has ignored the technical efficiency component of productivity. The econometric results suggest that stochastic frontier models generate higher mean technical efficiency estimates than deterministic models, while parametric frontier models yield lower estimates than nonparametric. The difference between parametric and non-parametric frontiers is reduced when the translog specification is used. Also, frontier models using cross-sectional data produce lower estimates than those based on panel data. The econometric results also suggest that low-income countries (LICs) present a lower mean technical efficiency than high-income countries (HICs). A more detailed analysis reveals that Western European countries and Australia present, on average, the highest levels of mean technical efficiency among all regions after accounting for some methodological features of the studies. Eastern European countries exhibit the lowest estimate followed by Asian and African countries, while studies from Latin America and Caribbean countries, and from North American countries are in an intermediate position.Farm Management,

Assessing the sensitivity of matching algorithms: The case of a natural resource management programme in Honduras

A fundamental challenge in impact evaluations that rely on a quasi-experimental design is to define a control group that accurately refl ects the counterfactual situation. Our aim is to evaluate empirically the performance of a range of approaches that are widely used in economic research. In particular, we compared three diff erent types of matching algorithms (optimal, greedy and nonparametric). These techniques were applied in the evaluation of the impact of the MARENA programme (Manejo de Recursos Naturales en Cuencas Prioritarias), a natural resource management programme implemented in Honduras between 2004 and 2008. The key findings are: (a) optimal matching did not produce better-balanced matches than greedy matching; and (b) programme impact calculated from nonparametric matching regressions, such as kernel or local linear regressions, yielded more consistent outcomes. Our impact results are similar to those previously reported in the literature, and we can conclude that the MARENA programme had a significant, positive impact on beneficiaries

Price, Yield and Net Income Variability for Selected Field Crops and Counties in Nebraska

The primary objective of this study was to establish an empirical estimate of the riskiness of various crops in different regions of Nebraska. For this purpose the variate difference method was used to estimate random variability indexes of prices, yields, and net returns for six Nebraska crops (wheat, soybeans, alfalfa, oats, grain sorghum, corn). The period of analysis included 1957-1976 and one county in each of the eight crop reporting districts was analyzed. Where relevant, both dryland and irrigated alternatives were examined. Most business decision-makers accept more risk only under the conditions that the probability of higher returns accompany risky choices. The authors believe that information in this report can be used by Nebraska farmers when deciding what crops to grow. Variability indexes can provide information regarding the riskiness of the various enterprises. The authors recognize that diversification can also be a useful approach to decrease net return variability along with insurance, commodity programs, and more sophisticated risk reducing strategies