Estimating farmers’ productive and marketing inefficiency using a non-separate approach: double bootstrap directional distance approach

This study proposes a semi-parametric model for estimating marketing and technical inefficiency using a non-separate approach. We use a consistent double bootstrap directional distance function that accounts simultaneously for expansion of outputs and prices indices and reduction of operating variables inputs. We apply our model to an urban vegetables production system in southern Benin characterized by short term life products. Results show that, although urban vegetables crop production farming is input intensive, there is a need to reduce loss of profit of producers. The results suggest that vegetables producers are more marketing inefficient than they appear technical inefficient with potential for reducing input and increasing outputs and outputs prices. The fact that marketing inefficiency of vegetables producers in our sample improves more than technical inefficiency underlines the importance of including an output pricing component in urban vegetables production models. The second-stage of our model shows that technical inefficiency is strongly related to the production environment and private extension services while marketing inefficiency is highly related to alternative marketing arrangements and specialization in crops production. The paper also provides empirical support for reducing inefficiency related to urban agriculture inputs use to address urban food insecurity problems in Benin.