ESTIMATING FARM TECHNICAL EFFICIENCY BY USING STOCHASTIC FRONTIER APPROACH

Abstract

The Iraqi agricultural sector suffers from many complex problems. Including poor management and failure to do the duties assigned to it, like the optimal use of factors of agricultural production Whe therat the level of planning or implementation, which is one of the reasons behind the lack of verification of high levels of agricultural production .Therefore, research goal to measure the technical efficiency, using analysis of Stochastic Frontier Approach( SFA), for 132 samples randomly collected from Diyala governorate .According to the transcendental logarithmic production function (TL).By focusing on the basic inputs used in all farms sample, which included as well as the dependent variable independent variables (amount of seeds, the amount of pesticides, hours of manual labor, working hours, farm size. As well as variables that are related to farm management (such as the age of the farmer, the peasant family size, years of experience. results indicate that the method of least squares was given in recognition modest for interrupted part B, As valued at 43.4 but higher than the values estimated in accordance with the method the of least squares corrected COLS and ML ,it reached38,38.5. The signal of studied variables came identical to the logic of economic except fertilizers and seeds. Average technical efficiency at the level of the sample was 66% and this result indicates that the farmers can increase their production by 34% without increasing any amount of economic resources used in the production process. This means that the sample lose a certain amount of economic resources and thus bear the additional costs equivalent of 34% of the costs of resources, and also means that the farmer could produce the same output with less Former including approximately 34% of the resources used, the average efficiency indicates that there is a deviation in the actual production at optimum output about 34% and could be achieved if farmers used the available economic resources in optimal ways. On this basis search recommended need to scientific methods in the management of all farms sizes and re-distribution of economic resources so as to ensure the same level of production or more while reducing cost and the need to develop the use of modern means and technique.