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Production efficiency of family farms and business farms in the Brazilian regions

Imori, Denise and Guilhoto, Joaquim José Martins and Postali, Fernando Antonio Slaibe (2012): Production efficiency of family farms and business farms in the Brazilian regions.

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Abstract

This paper aims to analyze the technical efficiency of farms in Brazil and its regions, based on the data from the 2006 Census of Agriculture. More specifically, it seeks to compare the technical efficiency of family farms in relation to business farms, considering the regional differences in the country. To do so, one simultaneously estimated, under different assumptions, stochastic production frontiers and inefficiency effects models. Thus, it was possible to measure the technical efficiency of farms, as well as analyze the influence of factors related to the production environment, allowing the indication of public policies aimed at improving the performance of producers. In the empirical estimation, it was observed, as expected, lower technical efficiency for family farms. In regional terms, with respect to the technical efficiency of business farms, the South region of Brazil stood out, also presenting, along with the Midwest region, the highest efficiency rates for family farms, on average. Regarding the influence of production environment, it was found that formal education and access to credit are noteworthy as important factors for the technical efficiency of Brazilian agriculture.

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