Impact of land ownership on productivity and efficiency of rice farmers: The case of the Philippines

Land is a key factor in production agriculture and the land rental market is an important institution in agriculture. Rental activity of both sharecropped and fixed rent arrangements represents about 25% of cultivated land in the Philippines. The Comprehensive Agrarian Reform Program (CARP) of 1988, which essentially redistributes land to landless farmers, has implications for land ownership and farm productivity. This study investigates the impact of land ownership on the productivity and technical efficiency of rice farmers in the Philippines. We use a 2007-2012 Loop Survey from the International Rice Research Institute (IRRI) and a stochastic frontier function method. Results show that land ownership has a significant impact on technical efficiency. In particular, counter to the theory, the CARP may have reduced the technical efficiency of leasehold farmers compared with owner operators. Additionally, results show that land area, fuel cost, fertilizer cost, irrigation cost, and labor cost are significant factors that affect rice production. We found a mean technical efficiency score of 0.79-still leaving room for improvement. Finally, educated females and farmers leasing land have higher technical inefficiency.