Journal of Rural Development
The Decomposition of Productivity and Profitability of Rice Production in Korea
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AuthorSung, Jaehoon
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Publication Date2019.09.30
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Original
This study analyzes changes in the profitability and productivity of Korean rice farms. Also we decomposes changes in the profitability into changes in terms-of-trade, technical change, technical efficiency change, scale efficiency change and mix efficiency change. To be specific, we constructs Lowe index which is ideal for the measurement of quantity change. Also, we apply data envelopment analysis methodology for decomposing TFP into the several efficiency measures. Farm production cost survey covering the period 2003 to 2016 is incorporated. The results show that the terms-of-trade would have the largest and negative effects on farms’ profitability. Also, rice farms in Korea are technically efficient, but they exhibited much lower mix efficiency. Lastly, farm operator’s age would have negative effects on farms’ mix efficiency, while larger farms tend to have greater mix efficiencies than smaller farms.
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