Production Efficiency of Rice Farms in Thailand and Cambodia: A Comparative Analysis of Ubon Ratchathani and Stung Treng Provinces

Abstract

Rice farmers in developing countries need to increase production efficiency in order to meet a growing rice demand. To identify and compare the determinants of rice production efficiency at different stages of economic development, a one-stage stochastic frontier model is applied to a cross-sectional dataset collected in 2013 of 623 households in Ubon Ratchathani (Thailand) and 407 households in Stung Treng (Cambodia). The results indicate that the average level of rice production efficiency is 72% in Thailand and 64% in Cambodia. There are a number of factors that commonly affect the production efficiency in both countries. These factors are the farm size, per capita income, amount of agricultural credit, degree of commercialization, and share of non-farm income. However, there are also a number of country-specific factors that are unique to the respective environments. These factors are the distance to fields, mechanization, agricultural assets, share of remittances, education of household heads, and distance to town in Thailand, and household size in Cambodia. These findings suggest that promoting the development of household capital, access to rural infrastructure as well as the specialization and commercialization of rice production would contribute to increasing production efficiency of rice farms in developing countries.

Keywords: Production efficiency, sustainable livelihoods, smallholders, Southeast Asia