Farm locations and dwelling clusters: Do they make production and technical efficiency spatially contagious? uri icon

abstract

  • In the last decades, local rice supplies in the Philippines have fallen short of local demand. As a result, the Philippines has become a net importer of rice. Reacting to this situation, the Philippine government introduced the Food Staples Sufficiency Program (FSSP) in 2012 with the belief that the Philippines can attain rice self-sufficiency. As physical farm expansion yields only 20% of the necessary increase in production, the remaining 80% must come from increased productivity. This study uses a sample of rice production areas in Central Luzon as representative of rice production in the Philippines. Stochastic production frontier analysis revealed that the average technical efficiency of farms in Central Luzon ranges between 0.76 and 0.92 in the wet and dry seasons. Increasing farm productivity can help attain the FSSP production target by potentially increasing yield per hectare. A combination of spatial econometrics with geostatistical tools demonstrated the presence of spatial dependence in yield and farm performance. Results show significant clustering of best and worst performing farms, specifically in Tarlac City. To increase farm technical efficiency and help attain food production targets at national and even global levels, policy interventions should consider focusing on geographically prioritized areas for technical efficiency improvement.

publication date

  • 2020
  • 2020