Economics at your fingertips  

Hope for Change: Is Diversifying Production Portfolios an Ideal Strategy to Boost Farming Efficiency in Afghanistan?

Hayatullah Ahmadzai

Progress in Development Studies, 2022, vol. 22, issue 1, 7-31

Abstract: In this article, I present empirical evidence on the extent of crop diversification and assess its merits as a strategy for improving production efficiency in Afghanistan. The transformed Herfindahl–Harshman index is used to measure the scale and magnitude of crop diversification. I find a compelling evidence that diversifying production portfolios significantly improves production efficiencies. This finding is critical, given that the data show that nearly a third of the farm households do not diversify, achieving, on average, about 52% of potential revenues. The estimated efficiency scores reveal that, on average, the farm households in our analytical sample of over 7,000 households achieve 74% of potential revenue, with nearly 15% of households realizing less than 50% and about 23% between 50% and 70% of potential revenue. These results infer that there exist substantial inefficacies in agricultural production that can be eliminated by employing improved management practices without having to use additional inputs and production resources and rising cost of production. Our results are robust to potential endogeneity bias in crop diversification; I account for the endogeneity problem in the stochastic frontier analysis, by employing a recent estimation approach, using instrumental variable techniques. Mapping the spatial distribution of crop diversification index and estimated efficiency scores across the country revealed that districts with higher diversification levels correspond to higher efficiency indices. Aside from crop diversification, other socio-economic factors also have critical implications for efficiency; households with access to farm assets (such as land, cattle, oxen and tractor) and extension services appear to realize substantially higher production efficiencies. A direct policy recommendation that can be generated from the findings of this study is that crop diversification should be given more recognition by policymakers to enhance productivity and resilience in agriculture.

Keywords: Crop diversification; production efficiency; endogenous stochastic frontier models; Afghanistan (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1177/14649934211031745

Access Statistics for this article

More articles in Progress in Development Studies
Bibliographic data for series maintained by SAGE Publications ().

Page updated 2023-03-26
Handle: RePEc:sae:prodev:v:22:y:2022:i:1:p:7-31