Production for wellbeing program: a stochastic meta-frontier perspective with pseudo control groups

Abstract

Mexico’s Production for Wellbeing program (Programa de Producción para el Bienestar, PWp) aims to increase the production and productivity of grains, coffee and sugarcane to enhance domestic food self-sufficiency and crop competitiveness for the nation’s small and medium-sized farmers. Through stochastic production frontier analysis (Kumbhakar and Lovell 2000) and meta-frontier (Battese and Rao 2002; Huang et al. 2014) analyses, this study investigated whether the PWp has influenced the technical efficiency (TE) of those beneficiaries who produce white corn or sugarcane, considering an impact evaluation framework, using the Mahalanobis distance for matching (Rubin 1980). Microdata come from the National Agricultural Survey (INEGI, 2019), and are complemented with poverty, climate, and regional data to identify microregions for policy intervention (Maruyama et al. 2018). We find that PWp beneficiaries were approximately 17.67% less efficient in white corn production and 3.22% more efficient in sugarcane production than non-beneficiaries. Moreover, their productive potential, defined by their technology, was 13.21% lower for white corn and 3.68% lower for sugarcane production relative to the sector’s production technology. We conclude that PWp beneficiaries need to improve their TE, and this requires targeted technical instruction and investment according to regional needs.