Technical Efficiency of Smallholder Wheat Farmers: The Case of Qu Zhou County of China

Abstract

Wheat is among the main crop produced next to rice and maize, in China. In wheat production, miracle achievement has been achieved, in the last several decades. However, the current production of wheat does not sufficiently meet its demand to the expected level. The yield is still low though improved agricultural technologies have been used by the farmers. As the productivity of wheat is not just determined by technological innovation alone but also by the efficiency with which available technologies are used, this study aims to estimate the technical efficiency of wheat producers and to identify the sources of its variation in the Qu Zhou County of China. A single-step stochastic frontier production model is used to analyze the data collected from the respondents through personal interviews. The result shows that the mean technical efficiency of wheat producers is 96 percent, indicating that, farmers have produced 4 percent less than the maximum output that can be produced. This shows that there is room for efficiency improvement and output can be maximized by 4 percent using the existing wheat production technologies without changing. The findings also show that agricultural inputs, in particular, fertilizer and insecticide have negative and significant effects on the wheat yield at 1 and 5 percent significance levels, respectively. This means increases in the amount of these inputs could lead to a reduction in wheat outputs. Conversely, a farm size allocated for wheat production has a positive and significant effect on wheat yield at a 10 percent significance level. Socioeconomic factors, such as education level, farming experience, seed cost, and soil fertility status are also observed sources of inefficiency in the study area. In general, the study has indicated that disparity between actual and potential yield is not a chance alone, but due to inefficiencies among the producers. Therefore, it is possible to make practical and effective interventions by focusing on factors that affect the technical efficiency of the wheat producer in Qu Zhou County.