Title: Farm size and its effect on the productive efficiency of sugar cane farms in Central Negros, the Philippines.
Abstract: This paper examines the productive efficiency of sugar cane production across farm size in the Philippines. Non-parametric Data Envelopment Analysis was used to determine the productive efficiency levels from a 1997-98 cross-sectional survey 1 of 24 sugar cane farms in Central Negros area. Results indicate that the small farm group appears to be n ot as economically efficient as the larger ones. Medium and large farm groups appear to be equally economically efficient. Therefore, from an agricultural policy point of view, the trend towards larger farm sizes could have a beneficial impact on the efficiency of the Philippine sugar industry as a whole. However, this countervails the trend set by the land reform law (CARL) which pursues social equity. Inefficiency differences among farm size groups appear to be related with the physical input used and cost. The higher input usage by the large farms tends to increase the quantity produced and, with the low price of inputs, generates a larger profit per hectare. The higher input prices faced by the small farmers tends to reduce the amount of input used thus giving a lower profit. Part of the allocative efficiency differences between the farm size groups may be attributed to the differences in the input price. Thus, government cooperative programs that provide farmers access to cheaper farm inputs throug h bulk purchasing may actually lead to increased productive efficiency.
Publication Year: 2012
Publication Date: 2012-01-01
Language: en
Type: article
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Cited By Count: 8
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