Technical Efficiency of Rice Farms in Different Agroclimatic Zones in the Philippines: An Application of a Stochastic Metafrontier Model

Abstract

Rice producers in the Philippines operate in spatially diverse physical environments that are largely beyond their control. We decompose total factor productivity into technical efficiencies and environment-technology gap ratios across four climatic zones for selected years from 1996/1997 to 2005/2006 using farm-level panel data. Results show surprisingly little interzonal and intertemporal variation in productivity. It appears that Philippine rice producers have been able to adapt their crop management strategies sufficiently to suit their particular agroclimatic conditions. However, after an increase in the first 5 years of the study period, mean environment-metatechnology gap ratios stagnated in the second 5 years. The metafrontier does not appear to have substantially shifted outwards over the whole period, suggesting that rice producers achieved little technological progress and increased total factor productivity.