Natural Resource Conservation and Technical Efficiency from Small-scale Farmers in Central Chile

This study estimates a stochastic production frontier to measure technical efficiency (TE) using farm-level survey data for a random sample of small-scale farmers in Central Chile. Socioeconomic and productive information was collected in season 2005/06 through a survey of 319 farmers in the Province of Linares. An important issue in the paper is the effect of adoption of soil and water conservation practices on productivity. The results reveal a positive relationship between the adoption of soil and water conservation and farm-level TE. The results also indicate that improvements in TE, when associated with conservation practices, not only lead to higher output and thus improvements in net returns, but also contribute to environmental sustainability. Moreover, the analysis reveals a positive relationship between TE and human capital variables such as education and agricultural extension