Metafrontier Analysis of Farm-level Efficiencies and Environmental-Technology Gaps in Philippine Rice Farming

Abstract

Rice producers in the Philippines operate in different physical environments that are largely beyond their control, especially in terms of the agroclimatic conditions they face. Each rice area requires a unique set of location-specific technologies to match its location-specific needs. The rice production frontier is expected to vary, depending on the degree of yield-enhancing interventions implemented by the government and adopted by farmers. Understanding differences in specific production frontiers in different production systems should provide better assessments of yield performance across different locations and enable rice scientists to develop location-specific technologies as well as disseminate appropriate technologies to farmers in different climatic zones. A precise analysis of productive efficiencies, technology gaps and technical change among these zones may contribute to a more accurate targeting and effective design of the government's rice program. We measure technical efficiencies and technological gaps in rice production for farmers in four agroclimatic zones in the Philippines who may employ different production technologies according to environmental conditions. Climatic zone 3 is considered most favourable for rice production based on the intensity and distribution patterns of rainfall. A stochastic metafrontier function is used to compare mean technical efficiency and the environmental and technological gap ratio (ETGR) across climatic zones. We estimated four regional stochastic frontiers using the standard stochastic frontier model based on a translog functional form. A deterministic metafrontier production function was then fitted to the regional frontiers. Farm-level panel data were used from a three-round survey covering six cropping periods - the wet seasons of 1996, 2001 and 2006 and the dry seasons of 1997, 2002 and 2007. Results show surprisingly little interzonal variation in productivity. First, the production frontiers are quite stable across the different agroclimatic zones. The mean ETGR is quite high in all zones and varies in a narrow range from 0.83 to 0.87. Farmers operating in agroclimatic zone 3 are the most productive group followed by those operating in agroclimatic zone 2. Mean technical efficiencies of farmers in respect of their group frontiers are also closely grouped, ranging from 0.74 to 0.76. It appears that Philippine rice producers have been able to adapt their crop management strategies well to suit their particular agroclimatic conditions.