Investigating efficiency and total factor productivity of rice production in Thailand: provincial and spatial analysis

Rice is an important commodity in Thailand for domestic consumption and for exportation. However, the yield of rice in Thailand is lower than that of many rice exporter countries and the average yield of the world. This study aims to investigate the performance of rice production and its improvement at the provincial level for the period 1997-2018 and for both rice seasons in Thailand. To this objective, this study employs the Malmquist productivity index using the Data Envelopment Analysis (DEA) approach to measure production efficiency and TFP change, as well as its decomposition, of rice production. Then the TFP changes will be further investigated for some determinant variables and for the spatial influences using panel spatial regression. Results from the performance measurement of rice production show that (1) there is a difference in production efficiency between the main rice and the second rice, where the latter is more efficient. (2) there are regional differences of the production efficiency of rice where provinces in the Central and the Northern regions are more technically efficient than that of the Northeastern and the Southern regions. (3) correlation matrix suggests that the main rice may operate under the decreasing return to scale of production. (4) both rice seasons faced average TFP regress during the period of the study while there are differences in the decomposition of TFP changes for each season. Results from the TFP determinant model show that (1) natural shocks, climate change, and global warming have detrimental effects on the TFP growth of rice in Thailand. (2) irrigation development and the amount of rainfall have positive effects on the TFP growth of the second rice. (3) adoption of high-yield rice variety has a positive effect on the TFP growth of the main rice. This study also found the spatial influence of TFP growth among provinces of Thailand which is suggest the existence of spillover effects of technology and improvement. The findings of this study suggest that in the short-run policymaker should utilize the spillover effects in order to improve performance of rice production. Reconsidering the objective and position of rice farming while incorporating climate change issues should be another important decision to be made in order to maintain food security as well as improve the resilience and economic condition of the rice farmers in Thailand in the long-run.