Economic efficiency measures and its determinants for irrigated wheat farms in Tunisia: a DEA approach

Abstract

The objectives of this study are twofold. Firstly, we aim to measure the technical, scale and economic efficiencies for a sample of 170 cereal farmers in Chebika region (Central Tunisia) using Data Envelopment Analysis (DEA) method. Secondly, computed efficiency scores are regressed on explanatory variables using a Tobit model, in order to identify its determinants. Results of the DEA model show that average technical, allocative and economic efficiencies under constant returns to scale (CRS) are 70.7%, 85.1% and 59.7%, respectively. By operating at full economic efficiency levels, the sampled farms would be able to reduce their costs of wheat production with around 39.3%. Pure technical efficiency, scale and allocative efficiency levels account respectively for 32.3 %, 34.1% and 33.6 % of the total cost reductions. Results of the Tobit regression indicate the positive effect, on economic efficiency, of variety choices, source of irrigation, membership in water users association, irrigation management and farm size. This suggests that there is potential to improve production efficiency through developing and implementing targeted programs for inefficient farmers, intensification of specific and targeted extension services, and encouragement of farmers’ membership to association.