Size, Fragmentation, and Inefficiency: A Single-Stage Stochastic Parametric Approach for Wheat Production in Iran

Although studies on the relation between size and efficiency are ample, studies on the relation between size, fragmentation, and efficiency are limited. It is the purpose of this study in which a single-stage stochastic parametric approach is used. For this purpose production of wheat in Iran is a good case because wheat is the core commodity of the Iranian agricultural system which is dominated by small and fragmented family farms. The data comes from a survey of wheat producers in West Azarbaijan province, a major agricultural region, located in the north-west of Iran, in which around 50 percent of the lands under annual crops is allocated to wheat, almost the same proportion as in the whole country. Mean size of farmland in the sample was 2.2 hectares (10,000 meters) ranging from 0.3 to 12 hectares; mean number of plots of land was 1.7 ranging from I to 7 plots. It was found that mean technical efficiency was 63.4 percent ranging from 11.6 to 95.1 percent. Significant inverse relation between total costs of inputs, as index of size, and positive relation between number of plots of land, as index of fragmentation, and technical inefficiency were found.