Natural Resources Research Articles

Rainfall and farm efficiency measurement for broadacre agriculture in South-Western Australia

Document Type

Article

Publication Date

2005

Journal Title

Australasian Agribusiness Review

Keywords

Rainfall, Farming, Broadacre farming, South-Western Australia, Farm technical efficiency, Data Envelopment Analysis (DEA), Environmental changes, Water management, Climate change, Annual rainfall

Disciplines

Agricultural Economics | Agricultural Science | Agronomy and Crop Sciences | Climate | Environmental Indicators and Impact Assessment | Environmental Monitoring | Fresh Water Studies | Hydrology | Meteorology | Natural Resources Management and Policy | Water Resource Management

Abstract

Few studies of farm technical efficiency consider differences in the physical environments of farms. This study examines rain-fed broadacre agriculture and shows how neglect of rainfall differences between farms affects measures of farm technical efficiency (TE). Applying data envelopment analysis (DEA) to a sample of broadacre farms, TE measures unconfounded by rainfall variation are generated by specifying rainfall as a non-discretionary production input in an input-orientated DEA model. These unconfounded TE measures are compared to other TE measures generated by a conventional DEA model that does not explicitly include rainfall. The conventional DEA model reports lower levels of technical efficiency, particularly for farms with below average rainfall, suggesting that measurement of TE should, where possible, include environmental effects such as rainfall.

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