EFFICIENCY ANALYSIS IN TURKISH AGRICULTURE USING STOCHASTIC FRONTIER INEFFICIENCY MODEL

The aim of this study is to evaluate the regional technical efficiency and identify determinants of regional agricultural production efficiency of Turkey. In this study, a stochastic frontier inefficiency model is used to estimate technical efficiency scores. Also, Tobit model with random effects is used to explain the variation in the technical efficiency scores related to Turkish agricultural production. The data used in this study were based on Turkish Statistical Institute, The Banks Association of Turkey and Turkish State Meteorological Service for 2007-2011 periods in Regional Level 2 (NUTS 2). The results of analysis show that regions having the highest efficiency in Turkish agriculture are Manisa, Afyon, Kütahya and Uşak in West, Antalya, Isparta, Burdur and Adana, Mersin in South in all the years. Regions having the lowest efficiency are İstanbul, Zonguldak, Karabük, Bartın, Kastamonu, Çankırı, Sinop, Erzurum, Erzincan, Bayburt, Ağrı, Kars, Iğdır, Ardahan in northern and eastern areas. Results of the Tobit model with random effects model demonstrate that, number of total agricultural equipment and machinery, total arable land and electricity consumptions for irrigation as expected, have a positive effect on technical efficiency of Turkish agriculture. These variables are significant contributor to production efficiency. Total rainfall variable have also a positive effect. But, this variable is no statistically significant.