Abstract
The establishment of tree crop plantations such as oil palms, coffee, or cocoa considerably contributes to the loss of tropical forests. Taking the case of cocoa production in Central Sulawesi as an example, this chapter investigates whether there is a potential for reducing deforestation by improving the productivity of tree crop plantations in rainforest margin areas by better crop management. Increased productivity would enable farmers to earn a living from a smaller area of land; thus, the expansion of low-productivity perennial cropping systems into forest land can be viewed as a waste of forest resources. In order to assess whether the productivity of the existing cocoa plantations in the research area could potentially be improved, the level of technical efficiency attained is estimated. A farmer is technically inefficient if he fails to produce the maximum output attainable for the level of inputs he uses. Technical inefficiency is caused by lacking know-how, for example with respect to the timeliness of agricultural operations such as weed control or crop hygienic measures.
After introducing the concept of technical efficiency (TE) and describing the method of Stochastic Frontier analysis to empirically estimate the level of TE, we show how this method was applied to our Sulawesi case. Using data collected in a sample of 202 farm households, we estimate separate Stochastic Frontier production functions for the two most important crops in the research area: cocoa, the primary cash crop, the cultivation of which has become widespread only in the 1990s, and irrigated rice (paddy) that has been grown for generations. Apart from estimating the levels of TE attained, we also investigate the influencing factors of efficiency in one single statistical procedure.
The estimated average TE in rice production is 77% as opposed to only 37% in cocoa cultivation; thus, the potential to increase production by improving crop management (not by increasing the level of input use!) is particularly large in the case of cocoa. The analysis of the factors influencing TE shows that poverty and illiteracy have an efficiency reducing effect in both rice and cocoa production. Agricultural extension services significantly increase efficiency in rice cultivation while this effect is not observed in cocoa production.
Acknowledging that increasing the productivity of perennial cropping systems in forest margin areas may also create incentives for deforestation, we then discuss the conditions under which enhanced productivity can be expected to have a forest saving or a forest clearing effect. We finally assess the likely outcome of improved TE in the case of Central Sulawesi and conclude that the comparatively low efficiency level currently found indicates a considerable potential for reducing deforestation by increasing farm incomes on already converted forest land, thus meeting both environmental and economic objectives. Policy interventions aimed at realizing this potential should include improved agricultural extension focusing on technical advice on the proper management of cocoa, but, at the same time, they need to control the influx of migrants attracted by the profitability of cocoa cultivation.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Abdulkadir-Sunito M, Sitorus MTF (this volume) From ecological to political buffer zone: ethnic politics and forest encroachment in Upland Central Sulawesi. In: Tscharntke T, Leuschner C, Zeller M, Guhardja E, Bidin A (eds) The stability of tropical rainforest margins, linking ecological, economic and social constraints of land use and conservation. Springer, Berlin Heidelberg New York
Aigner D, Lovell CAK, Schmidt P (1977) Formulation and estimation of stochastic frontier production function models. Journal of Econometrics 6: 21–37
Ali M, Flinn JC (1989) Profit efficiency among basmati rice producers in Pakistan Punjab. American Journal of Agricultural Economics 71: 303–310
Angelsen A, Kaimowitz D (eds) (2001) Agricultural technologies and tropical deforestation. CABI Publishing, in association with Center for International Forestry Research (CIFOR), Wallingford, UK
Angelsen A, van Soest D, Kaimowitz D, Bulte E (2001) Technological change and deforestation: a theoretical overview. In: Angelsen A and Kaimowitz D (eds) Agricultural technologies and tropical deforestation. CABI Publishing, in association with Center for International Forestry Research (CIFOR), Wallingford, UK, pp 19–34
Battese GE (1992) Frontier production functions and technical efficiency: A survey of empirical applications in agricultural economics. Agricultural Economics 7: 185–208
Battese GE (1997) A note on the estimation of Cobb-Douglas production functions when some explanatory variables have zero values. Journal of Agricultural Economics 48: 250–252
Battese GE, Coelli TJ (1995) A model for technical inefficiency effects in a stochastic frontier production function for panel data. Empirical Economics 20: 325–332
Bravo-Ureta BE, Pinheiro AE (1993) Efficiency analysis of developing country agriculture: A review of the frontier function literature. Agricultural and Resource Economics Review 22: 88–101
Brümmer B (2001) Estimating confidence intervals for technical efficiency: The case of private farms in Slovenia. European Review of Agricultural Economics 28: 285–306
Chambers RG (1988) Applied production analysis: A dual approach. Cambridge University Press, Cambridge, UK
Coelli TJ (1996) A guide to FRONTIER Version 4.1: A computer program for stochastic frontier production and cost function estimation. CEPA Working Paper 96/07. Centre for Efficiency and Productivity Analysis, University of New England, Armidale, NSW, Australia
Coelli TJ, Rao DSP, Battese GE (1998) An introduction to efficiency and productivity analysis. Kluwer Academic Publishers, Dordrecht, The Netherlands
Ellis F (1993) Peasant economics. Farm households and agrarian development. 2nd Edition. Cambridge University Press, Cambridge, UK
Eswaran M, Kotwal A (1989) Credit as insurance in agrarian economies. Journal of Development Economics 31: 37–53
Farrell MJ (1957) The measurement of productive efficiency. Journal of the Royal Statistical Society 120: 253–290
Feder G, Just R, Silberman D (1985) Adoption of agricultural innovations in developing countries: A survey. Economic Development and Cultural Change 33: 255–298
Gimbol KC, Battese GE, Fleming EM (1995) Technical efficiencies of smallholder cocoa producers in Papua New Guinea: A Stochastic Frontier Analysis. Quarterly Journal of International Agriculture 34: 337–357
Greene WH (1990) A Gamma-distributed stochastic frontier model. Journal of Econometrics 46: 141–163
Jondrow J, Lovell CAK, Materov IS, Schmidt P (1982) On the estimation of technical inefficiency in the stochastic frontier production function model. Journal of Econometrics 19: 233–238
Kaimowitz D, Angelsen A (1998) Economic models of tropical deforestation: A review. Center for International Forestry Research (CIFOR), Bogor, Indonesia
Kalirajan K (1981) An econometric analysis of yield variability in paddy production. Canadian Journal of Agricultural Economics 29: 283–294
Kalirajan K (1990) On measuring economic efficiency. Journal of Applied Econometrics 5: 75–85
Kodde DA, Palm FC (1986) Wald criteria for jointly testing equality and inequality restrictions. Econometrica 54: 1243–1248
Kumbhakar SC, Ghosh S, McGuckin JT (1991) A generalized production frontier approach for estimating determinants of inefficiency in U.S. dairy farms. Journal of Business and Economic Statistics 9: 279–286
Maertens M (2003) Economic modeling of agricultural land-use patterns in forest frontier areas: Theory, empirical assessment and policy implications for Central Sulawesi, Indonesia. dissertation.de-Verlag im Internet, Berlin, Germany
Meeusen W, van den Broeck J (1977) Efficiency estimation from Cobb-Douglas production functions with composed error. International Economic Review 18: 435–444
Pitt MM, Lee LF (1981) Measurement and sources of technical inefficiency in the Indonesian weaving industry. Journal of Development Economics 9:43–64
Reifschneider D, Stevenson R (1991) Systematic departures from the frontier: A framework for the analysis of firm inefficiency. International Economic Review 32: 715–723
Ruf F (2001) Tree crops as deforestation and reforestation agents: the case of cocoa in Côte d’Ivoire and Sulawesi. In: Angelsen A and Kaimowitz D (eds) Agricultural technologies and tropical deforestation. CABI Publishing, in association with Center for International Forestry Research (CIFOR), Wallingford, UK, pp 291–315
Seiford LM (1996) Data Envelopment Analysis: The evolution of the state of the art (1978–1995). Journal of Productivity Analysis 7: 99–138
Stevenson RE (1980) Likelihood functions for generalized stochastic frontier estimation. Journal of Econometrics 13: 57–66
Thiam A, Bravo-Ureta BE, Rivas TE (2001) Technical efficiency in developing country agriculture: A meta analysis. Agricultural Economics 25: 235–243
von Thünen JH (1826) Der isolierte Staat in Beziehung auf Landwirtschaft und Nationaloekonomie. Reprint in 5th edition (1990). Scientia Verlag, Aalen, Germany
Weber R, Faust H, Schippers B, Mamar S, Sutarto E, Kreisel W (this volume) Migration and ethnicity as cultural impact factors on land use change in the rainforest margins of Central Sulawesi, Indonesia. In: Tscharntke T, Leuschner C, Zeller M, Guhardja E, Bidin A (eds) The stability of tropical rainforest margins, linking ecological, economic and social constraints of land use and conservation. Springer, Berlin Heidelberg New York
WWF (1981) Lore Lindu National Park Management Plan 1981–1986. A World Wildlife Fund report for the Directorate of Nature Conservation. Bogor, Indonesia
Zeller M, Schrieder G, von Braun J, Heidhues F (1997) Rural finance for food security for the poor: Implications for policy and research. International Food Policy Research Institute (IFPRI), Washington, D.C.
Zellner A, Kmenta J, Drèze J (1966) Specification and estimation of Cobb-Douglas production function models. Econometrica 34: 784–795
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2007 Springer-Verlag Berlin Heidelberg
About this chapter
Cite this chapter
Keil, A., Birner, R., Zeller, M. (2007). Potentials to reduce deforestation by enhancing the technical efficiency of crop production in forest margin areas. In: Tscharntke, T., Leuschner, C., Zeller, M., Guhardja, E., Bidin, A. (eds) Stability of Tropical Rainforest Margins. Environmental Science and Engineering. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-30290-2_19
Download citation
DOI: https://doi.org/10.1007/978-3-540-30290-2_19
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-30289-6
Online ISBN: 978-3-540-30290-2
eBook Packages: Earth and Environmental ScienceEarth and Environmental Science (R0)