Economic Efficiency Measurement of Agricultural Cooperatives; Using Stochastic Frontier and Data Envelopment Analysis
Hamid Sepehrdoust
Assistant Professor, Department of Economics, Bu-Ali-Sina University
Seyed Hadi Yousefi
MA Student, Department of Economics, Bu-Ali-Sina University
Abstract
Agricultural production cooperatives are considered efficient instruments for socio- economic development of the country, especially in rural areas. The purpose of this paper at first is to evaluate the important place of agricultural production cooperatives in regional farm and non-farm activities development and the second aim is to answer the basic question that whether agricultural cooperatives in Hamedan province of Iran could achieve full economic factors for promoting economic efficiency of agricultural production cooperatives? For this purpose, the economic efficiency of 65 out of 70 agricultural production cooperatives of Hamedan province are measured for the year 2010, by using parametric and nonparametric methods; means stochastic frontier production (SFP) and data envelopment analysis (DEA). Moreover, two-sample t-test for equality of means is used to compare the mean differences of efficiency level as well. The results show that generally the average economic efficiency of agricultural production cooperative measured by both methods is low and the variance among the cooperatives is high. Our findings showed that cooperative's profit is positively related to the current capital value of cooperative, expenditures made for activities, number of cooperative members and level of manager's knowledge. Implication of these factors; while increasing management experience, cultural acreage under irrigation and relevant educational skill level of the manager would eventually increase cooperative's performance.
Keywords: Agriculture, Cooperative, Performance, Efficiency, SFP, DEA
JEL: R50, R11, R58 |
