Cost and environmental efficiency of rice farms in South Korea

Thanh Nguyen, Trung, Hoang, Viet-Ngu, & Seo, Bumsuk (2012) Cost and environmental efficiency of rice farms in South Korea. Agricultural Economics, 43(4), pp. 369-378.

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We examine cost and nutrient use efficiency of farms and determine the cost to move farms to nutrient-efficient operation using Data Envelopment Analysis (DEA) with a dataset of 96 rice farms in Gangwon province of South Korea from 2003 to 2007. Our findings show that improvements in technical efficiency would result in both lower production costs and better environmental performance. It is, however, not costless for farms to move from their current operation to the environmentally efficient operation. On average, this movement would increase production costs by 119% but benefit the water system through an approximately 69% reduction in eutrofying power (EP). The average estimated cost of each EP kg of aggregate nutrient reduction is approximately one thousand two hundred won. For technically efficient farms, there is a trade-off between cost and environmental efficiency. We also find that the environmental performance of farms varies across farms and regions. We suggest that agri-environmental policies should be (re)designed to improve both cost and environmental performance of rice farms.

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8 citations in Web of Science®

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ID Code: 65632
Item Type: Journal Article
Refereed: Yes
Additional URLs:
Keywords: Material balance principle, Efficiency, Rice, South Korea
DOI: 10.1111/j.1574-0862.2012.00589.x
ISSN: 1574-0862
Subjects: Australian and New Zealand Standard Research Classification > ECONOMICS (140000)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Economics & Finance
Deposited On: 02 Jan 2014 23:37
Last Modified: 26 Jun 2014 04:50

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