POTATO PRODUCTION STRATEGIES IN BRAZIL: THE INFLUENCE OF DETERMINANTS OF TECHNICAL AND ECONOMIC EFFICIENCY

Abstract

The potato market in Brazil is unstable that results from the uncertainty of supply of and demand for, causing severe price fluctuations. The cost of production is high and average production is low, which resulting in low profitability and pointing to a lack of technical and economic efficiency. This study aimed to analyze the determinants of technical and economic efficiency in potato production in Brazil. A primary survey was done to collect primary data with a structured interview schedule. To measure technical and economic efficiencies, we use a stochastic method of the production frontier in which the inefficiency component is heteroscedastic, and to identify the determinants that affect these efficiencies we use a halfnormal model. We found that the average technical efficiency was 82%, cost efficiency was 83%, and profit efficiency was 40%. Harvesting, processing, and commercialization, as well as the use of systems and procedures for farm management, are found to be the main determinants of these efficiencies in potato production in Brazil.

Keywords

• management
• agribusiness
• mechanical harvesting
• production function
• production systems