Analysis on technical efficiency of maize farmers in the northern province of Laos

Abstract

Since the last decade, cash crop farming in Laos has significantly been changing. The changes have made farmers required high input factors (labor, land, fertilizer and so on) to increase productivity. Meanwhile, farmers have low level of technical efficiency and operating farms unproductive. Therefore, the objectives of this study were to estimate the technical efficiency (TE) of maize farmers and identify an inefficient factor that affects maize yield in Northern Laos. The Cobb-Douglas and translog stochastic frontier production function were used to estimate the technical efficiency and its determinants in maize yield. This study was the first to report on technical efficiency of maize farmers in Laos. The finding of this study revealed that the labor and machinery costs were found to have positive and significant effect on maize yield. The mean technical efficiency was 65%; this implies that the output per farm can be increased on an average by 35% for maize farmers under prevailing technology, without increasing any additional inputs. Only 30.6% of the total sample farmers obtained more than 81% of technical efficiency score. Other factors which affect maize yield showed that farmers with higher level of maize growing experiences and their farms on low elevation (<360 m) can reduce the farmer’s inefficiency. For the educated farmers, elder farmers, farm size, and hybrid seeds variable has a potential to reduce technical inefficiency.