Evaluating input use efficiency in agriculture through a stochastic frontier production: An application on a case study in Apulia (Italy)

Abstract

© 2019 The Authors Water is considered the most critical resource for sustainable agricultural development worldwide. Water scarcity has become an issue, especially in arid and semi-arid areas. There is the need to develop efficient management options to reduce water consumption and waste. In order to measure irrigated crop technical efficiency, a stochastic frontier production method – in which the inefficiency component is heteroscedastic – is used with the aim to assess what crop type and production technique revealed highest efficiency. The model is applied to a case study in southern Italy by using 2016 data from the EU Farm Accountancy Data Network. Our results show that the assumption of heteroscedasticity in the one-sided error term in the stochastic frontier is valid: individual farms’ characteristics critically influence technical efficiency. Processing tomato is the most efficient crop production system; organic farms tend to have a lower level of technical efficiency compared to conventional farms; and fertigation system is found to increase the level of technical efficiency.