Technical efficiency, technological change and output growth of wheat farms in Saskatchewan

This paper utilizes recent advances in stochastic decomposition methodology to examine the level and the driving forces of technical efficiency for an unbalanced panel data set of 100 wheat farms in Saskatchewan during the period 1987-95. The contributions of resource use and total factor productivity to the output growth of these farms are also investigated. The analysis indicates moderate levels of technical efficiency and a considerable variation of efficiency ratings among Saskatchewan farms. The ownership status, composition of labor employed, participation in crop insurance and government income transfer programs, participation in Top Management Workshops, degree of specialization, level of intensification and mechanization of production, type of land used, and the farm debts account for differences in efficiency across wheat farms. Even though the productive efficiency of the farms has been increasing over time, the results show that technological progress was the main source of productivity, and output growth during the study period.