Nonradial Technical Chemical Input Use Efficiency and in Agriculture

Radial and nonradial measures of technical efficiency are calculated empirically for Florida vegetable farms using DEA (data envelopment analysis) techniques, Use of the nonradial measures to calculate overuse of chemical inputs by inefficient farmers is demonstrated and the potential for reduced environmental loading of pesticides and fertilizers by improving efficiency is evaluated. Over the last four decades, pesticides and fertiliz-ers have played an integral role in the technologi-cal advances that have doubled total factor produc-tivity in U.S. agriculture (USDA, 1990). The use of these chemical inputs, however, has also raised health and environmental concerns (Cooper and Loomis; Hallberg; Harper and Zilberman; Mott). In particular, concern over the safety of our food supply and the quality of groundwater has moti-vated economists to examine ways for farmers to reduce their dependence on these chemicals, with-out a detrimental impact on consumers budget or on farmers profitability. In his seminal paper, Farrell noted in 1957 that in addition to its theoretical importance, determi-nation of efficiency is valuable for the economic policy maker because it provides information on how much a firm or industry can increase output “by simply increasing its efficiency, without ab-sorbing further resources. ” Equivalently, techni-cally inefficient firms can be brought towards the frontier (which describes the minimum amount of inputs required to produce some desired output level) by cutting back overused inputs. The im-provement in the effectiveness of input use, par-ticularly in the case of fertilizers and pesticides, can increase farm profitability as well as alleviate health and environmental concerns. In this regard, the efficiency of fruit and vegetable production is especially important because of its intensive use of chemical inputs. For example, in 1990, pesticide expenditures per acre by fruit and vegetable grow-ers were about $100, nearly seven times the agri