Are there differences in technical, allocative, and cost efficiencies among production scales? The case of vietnamese household pig production

Abstract

To enhance the competitiveness of smallholder pig production and reduce its influence on the environment in a sustainable way, scaling up production scale and adopting new management practices, called Vietnamese Good Husbandry Practices (VietGAHP), have been promoted as development strategies to smallholders in Vietnam in recent years. Although the advantage of economies of scale in production efficiency has been shed light on the commercial and large livestock farm in developed countries. However, a developing country such as Vietnam, smallholders are prominent and continue leading the agriculture, especially in pig production. The questions remain whether there is any chance to household pig production scale up their production and adopt new management practices to improve farm production efficiency. Thus, the objective of this study is to identify the influence of production scale and VietGAHP adoption to production efficiency of household pig production. Based on the high quality of primary data in our survey and a combination of an input-oriented data envelopment analysis, the Tobit model and other comprehensive statistical tests, the results found that the farmers could reduce 24.7% of their total costs without changing output level. Moreover, there were significantly higher allocative and cost efficiencies in larger production scale and adopting new management practices brought the higher level of technical efficiency. Based on these findings, we suggest ways that the government could improve the current system to help even among household pig production, who are the main agricultural producers in developing countries such as Vietnam, scale up their farms and adopt new management practices to improve their performance.