TECHNICAL EFFICIENCY ANALYSIS OF WHEAT PRODUCERS INKAZAKHSTAN AND RUSSIA: STOCHASTIC FRONTIERAPPROACH

Abstract

Kazakhstan, Russia and Ukraine (KRU) already collectively
account for about quarter of the world wheat exports and those countries have
still huge unrealized production potential. This production potential can be
realized if improvements in production efficiency achieved since an average
yields yet are far below compared to the developed countries like US and
Canada. Need for efficiency improvements are often mentioned and
governments implemented several policy reforms to advance production
efficiencies. However, empirical research on the effects of such policy reforms
is scarce, particularly in the case of KRU countries. This study aims at filling
this gap with using cross-sectional data from wheat producing farms across six
regions of Kazakhstan and Russia employing a two-step stochastic frontier
production analysis. Analysis suggest that the factors like an access to capital
assets, farmer’s education and use of crop insurance can improve technical
efficiencies of farms. On the other hand, subsidy payments from government
seem to have strong negative impact on farm’s technical efficiency.