Input and output technical efficiencies of wheat production in Kerman, Iran

Abstract

The Iranian government encourages farmers to produce wheat (a common agricultural enterprise) by increasing farm productivity and efficiency. In this paper, using a Cobb-Douglas frontier production function, a simple relationship between a farm-level output-based technical efficiency measure (the Timmer index) and an input-based measure (the Kopp index) is first developed. Then, using 1995 data from 164 farms in Kerman province, Iran, the average Timmer and Kopp indexes were estimated at 0.93 and 0.91, respectively, and were found to be similarly affected by farm size (positively up to about 9 ha) and by input ratios, though with rather small explanatory power. Thus, there seems some but limited scope to increase the profitability of Iranian wheat production either by increasing the product, given input levels, or by decreasing inputs for the current level of wheat production. However, since wheat producers may be able to adapt their production process more easily and quickly by implementing new techniques, i.e. by more efficient combination of inputs, than by adopting new technology, correction of input over-use can be regarded as a policy with speedy if limited effect in this case. © 2001 Elsevier Science B.V.