Kolawole Ogundari Dept. of Applied Economics & Statistics, University of Delaware USA Titus Awokuse Dept. of Agricultural, Food & Resource Economics Michigan State University USA Land Tenure and Technical Efficiency of Rice Farms in Thailand

Outline Background information Objective Empirical method Data source & data description Results & Discussion Conclusions

Background Information Traditional tenure impedes agricultural development. This increases support for the formalization of land tenure. Tenure security is considered essential for poverty reduction. Land per person in South Asia is one of the lowest in the World. This makes land a major limiting factor in rice production in Asia. Asia accounts for nearly 90% of total rice production in the world. Many countries with different land reform policies in the region. Partial Land rights policy dominates in land reform in Thailand.

Background Information Cont’d E.g., Philippine embraces comprehensive land policy (CLP). CLP allows land markets to operate freely with no limitation. In contrast, Partial land rights policy has many restrictions. Two school of thoughts on how formalized title affects Ag. Productivity (Michler and Gerald, 2015) : 1 st group lends support to investment in productivity enhancing measures due to security of the tenure. This includes measures such as irrigation, drainage, fertilizer etc. 2 nd group argues that tenure security through efficient land rental /sale market will in turn increase productivity of the land. The study tests both assumptions based on TE effects of tenure arrangements identify the study.

Objective of the study To investigate the relationship between technical efficiency of rice farms and farmlands cultivated under inherited, purchased and rented tenure arrangement in Thailand. Using the results above, we test whether tenure security promotes: -Investment in productivity enhancing effect in Thailand OR -land market-based allocative efficiency in Thailand.

Empirical model We use stochastic frontier analysis (SFA) The model specification for SFA is translog defined as: where: - Y is rice produced in kg - X is inputs used [e.g., fertilizer, seeds, agrochemical ] & Size of farm under inherited, owned, and rented farmland Inefficiency effect: Z is socio-economic feature of farm/farmers including: size of farm under inherited, owned, and rented farmland

Data source & data description Carried out from 4th August – 26th September 2014 ; In Bangplama District in Suphan Buri Province; 57% of the population were employed in rice farming, Province is with the highest rice production in Thailand; District has highest rice planting area in Thailand; 18 farmers each from all 14 Sub-Districts randomly selected ; A total of 252 rice farmers selected for the study.

Results & Discussion Average TE by size of farmland under owned, rented and inherited tenure arrangements is about 0.925, 0.934, & respectively. This shows that there is no significant differences between the TE across tenure arrangements. But determinants of TE of rice production shows that: -Owned farmland increases TE of rice production significantly. -Inherited farmland decreases TE of rice production significantly. -Rented farmland has no effect of TE of rice production.

Results & Discussion Cont’d Two possible outcomes can be derived from the results; *No evidence that land market-based efficiency allows land rental market to operate efficiently. *Evidence shows that farmland owned increases TE compared to farmlands inherited. Finding aligns with the investment- inducing productivity effect. Tenure security (due to owned farmland) influences farmer’s decision to investment in soil-improvement and conservation productivity measures.

Conclusions We find no significant differences in the mean TE across each of the three lands; But we find that owned farmland significantly increase TE of rice farmers. Land cultivated under inherited tenure arrangement significantly decrease TE, TE is positively but insignificantly correlated with rented land. The findings lend support to the theory that secure titles enhances farmers’ TE; It also shows that land rental markets might be inefficient in allocating land to farmers due to significant correlation between owned farm land and TE in the study.

Acknowledgements We thank the department of Applied Economics and Statistics, University of Delaware for providing fund to attend this conference. We equally thank Ms. Kwanchanok Kanjanatit who collected the data used in the study for her master’s thesis at Kyushu University Fukuoka Japan and subsequently allow the data to be use for this study.

THANKS