Richard V. Llewelyn

Nonparametric analysis of technical, pure technical, and scale efficiencies for food crop production in East Java, Indonesia

Non parametric analysis of technical efficiency for irrigated farms in the Madiun regency in the west-central part of East Java, Indonesia is conducted using linear programming techniques. This procedure allows the relative technical efficiency for each farm to be determined and for inefficiencies to be decomposed into pure technical inefficiency and scale inefficiency and does not require restrictions or assumptions regarding functional form to be placed on the data. Farmers in Madiun generally are efficient relative to each other. Farmers operating inefficiently do so more often because of scale inefficiencies rather than pure technical inefficiencies. A rna jority of the farms operate in the region of decreasing returns to scale rather than increasing returns to scale. Farmer age, the level of diversification of cropping activities, and high school education were found to be related to technical efficiency in the rainy season under irrigated conditions. Other socioeconomic factors were not statistically significant. The results imply that inefficient farms use excessive levels of inputs, particularly nitrogen fertilizer. This is perhaps due to the lingering effects of past input subsidization policies, particularly of fertilizers, in Indonesia, or to risk-reducing behavior. The results also imply that current government policies to encourage diversification of cropping practices in Java may lead to greater technical inefficiencies in production. In addition, extension education targeted to younger farmers with low levels of formal education would improve efficiency.

Government intervention and market integration in Indonesian rice markets

Long-run spatial price relationships in Indonesian rice markets and factors affecting the degree of market integration are evaluated using multivariate cointegration tests with weekly price data for the 1982-1993 period. The analysis includes evaluation of pre-self-sufficiency and post-self-sufficiency periods as well as for the entire period. The cointegration tests for entire Indonesian rice market, represented by the nine most relevant price series, indicate that relative to the pre-selfsufficiency period, the post-self-sufficiency period has a smaller degree of market integration. The change of the degree of market integration over time indicates that rationalizing of the Indonesian rice price policy beyond 1984 rice self-sufficiency has resulted in a less integrated market. This suggests that the policy shift has allowed the government to decrease its intervention without significantly decreasing market integration, indicating that the private sector is responding to price signals appropriately. It is possible that further reduction in intervention through widening the band between the floor and ceiling price could be accomplished without greatly affecting market integration. Regression results show that government intervention in terms of rice procurement significantly influenced market integration during the period of post-self-sufficiency (1985-1993) and the entire period of 1982-1993. This indicates that this aspect of government intervention has had positive influences on market integration, in contrast to distribution efforts, which were not found to be statistically significant. Procurement prices may be high, and could perhaps be lowered, reducing program costs. Regional per capita income is also found to be positively related to higher levels of market integration, suggesting that in periods of economic growth, government intervention may be decreased, thereby reducing program costs.

Risk Analysis of Tillage Alternatives with Government Programs

Stochastic dominance analysis of two tillage systems, conventional tillage and no-tillage, for five crop rotations, wheat-fallow, grain sorghum-fallow, continuous wheat, continuous grain sorghum, and wheat-grain sorghum-fallow, shows that risk-averse managers prefer a conventional tillage wheat-sorghum-fallow system. Small changes in production costs or yields lead to indifference between this system and the no-tillage wheat-sorghum-fallow and no-till and conventional wheat-fallow systems. Participation in the basic government commodity program generally increases average net returns and lowers variation of returns. Government commodity program payments calculated under a variety of scenarios do not generally encourage the use of no-till practices for grain sorghum and wheat in the central Great Plains.

An Economic Comparison of Conventional and Alternative Cropping Systems for a Representative Northeast Kansas Farm

The 1990 Food, Agriculture, Conservation, and Trade Act (FACTA) prescribes a vigorous agenda for environmentally-compatible farmingsystems research. This type of system has been labeled alternative agriculture and can be defined as a system of food production that includes a plan for profitable production with concern for reduction in off-farm inputs; use of natural or biological processes; and improved management and conservation of soil, water, and other biological resources (National Research Council). Alternative agriculture studies are important to producers who are developing production plans that must meet the increasing demands of agricultural and environmental soil conservation policies, water quality legislation, and uncertainty in the marketplace. Studies in Nebraska and South Dakota

Risk Analysis of Tillage and Crop Rotation Alternatives with Winter Wheat

The economic feasibility of soybeans, grain sorghum, and corn in annual rotation with winter wheat using reduced tillage and no-tillage systems in the Central Great Plains was evaluated, with continuous wheat and grain sorghum also analyzed. Net returns were calculated using simulated yield and price distributions based on historical yields, two historical annual price series, and 2011 costs. Stochastic Efficiency with Respect to a Function was used to determine the preferred strategies under various risk preferences. The no-till wheat-soybean and reduced-till wheatsoybean systems are the first and second most preferred, regardless of the level of risk aversion.

Replanting strategies for grain sorghum under risk

Abstract Risk analysis of replanting strategies for grain sorghum at three Kansas locations was conducted using stochastic dominance techniques. Yield data were simulated for seven planting dates, six seeding rates or target plant populations, and three maturity classes over a 33-year period using weather data for each year at each location. The results showed that optimal planting dates, seeding rates, and maturity classes vary by location and risk preference. In northeast and southcentral Kansas, planting at later rather than earlier dates was preferred as risk aversion increased. In southwest Kansas, generally no change occurred in the preferred strategy as the level of risk aversion increased. Early- and medium-maturing hybrids and low-to-moderate seeding rates often were selected. Late-maturing hybrids never were selected by risk-averse managers. The degree of risk aversion did not significantly affect the selection of a replanting strategy for southcentral and southwest Kansas, but did for northeast Kansas. However, whether managers replanted immediately or delayed, replanting varied with the replanting decision date and degree of risk aversion. Replanting on the first replanting decision date in southwest Kansas rather than delaying 2 weeks or more was preferred by all risk-averse managers. More strongly risk-averse managers in the northeast and all risk-averse producers in southcentral Kansas preferred to delay replanting of damaged stands, in some cases by 2–4 weeks after the decision date. Results also showed that when a stand was damaged late in the season, the expected yield from the damaged stand had to be lower than that from a stand damaged early in the season in order for replanting to occur. Price changes had only minor impacts on the preferred replanting strategies. A higher crop price caused replanting to occur more often, because the yield reduction of a damaged stand required for replanting to be economically feasible grew smaller as the price increased.

A risk analysis of adjusted gross revenue-lite on beef farms

This study evaluates the Adjusted Gross Revenue-Lite (AGR-Lite) whole-farm adjusted gross revenue insurance program on net farm income risk using panel data from 49 southeast Kansas beef farms. On average for the group, but not each individual farm, AGR-Lite reduces the mean and standard deviation of net farm income, raises the average minimum, and lowers the average maximum observations of the net income distribution. Thirty-four farms (69%) received at least one indemnity payment. Stochastic efficiency with respect to a function reveals that AGR-Lite is preferred by 18 of the farm managers (37%) when an upper bound on the risk-aversion coefficient is used.