Farm production efficiency and natural forest extraction: Evidence from Cambodia

Farm production and natural forest extraction remain principal livelihood strategies of local people in many rural areas of the developing world. In this paper, we apply stochastic frontier analysis to evaluate farm production efficiency and simultaneous equations modelling to estimate the interrelationship between farm production efficiency and natural forest extraction. We use a two-year panel dataset of 430 rural households in Stung Treng province of Cambodia. We find that natural forest extraction is decreasing in farm production efficiency. Our results suggest that improving farm production efficiency, via the promotion of rural education and privatization of farm land, should be considered an integral component of natural forest conservation policy.