Deepening the measurement of technical inefficiency in private farming in Georgia: locally parametric regression

This study deepens the measurement of technical inefficiency in private maize farming in Georgia, applying locally parametric (LP) reg ression method, whicb builds on the stochastic frontier production function approach. Detailed survey data for 221 mixed farms for 1997 are used in the estimations. Findings suggest: (i) maize production can be further increased by breaking up large farms into smaller parcels; and (ii) increased schooling and farm experience of new private farm operators would further reduce the inefficiency. Furthermore, global and local estimations of the inefficiency suggest different policy directions as to the future of maize farming. The global estimations, revealing non-discriminant overestimation of the inefficiency, prejudice broad-based farm reforms. On the contrary, the local estimations, pointing out relatively large farms as the key source of the inefficiency, favor the design of specific policies for the effective operation of lage farms.