Changes in the Efficiency of Rice Production in Thailand

Abstract

     By applying the time-varying Cobb-Douglass production frontier model with unbalanced panel data between the crop year (CY) 1987/88 and CY 2007/08, it was discovered that the returns to scale from rice production in Thailand have been decreasing. This is a sign that an increase in the amount of inputs may not improve rice yield performance. Even with the adoption of labor-saving technology and machinery over the last two decades, the efficiency of rice production in terms of yield increase has been less than the maximum potential yield. Instead, there has been a declining trend. The empirical study showed that the mean technical efficiency score was 88.32 percent in CY 1987/88 and this decreased to 72.63 percent in CY 2007/08, which indicates that the farmers in CY 1987/88 utilized their resources more effectively than the farmers in CY 2007/08. Moreover, the technical efficiency score of rice production in irrigated areas was higher than that in other areas, which implied that irrigation development was the key factor for improvements in technical efficiency.