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Abstract
This study examines the BMP adoption and technical efficiency for canola
producers in the Canadian Prairie Provinces. A Just-Pope stochastic frontier production
function is estimated using data from a survey of canola producers conducted in early
2012. Yield is modeled as a function of nutrients and precipitation. A linear inefficiency
function includes farm specific variables and a set of binary variables representing BMP
adoption. These include use of environmental farm plans and soil testing, precision
farming techniques or nutrient management practices. Model results indicate that BMP
variables for soil tests, nutrient management planning and precision farming are
positively related to technical efficiency while other BMP indicators are not significant.
Producer characteristics such as experience and off-farm income tend to have the
expected relationship with technical efficiency. Model results appear to be significantly
influenced by moisture problems that occurred through the Prairie region during the
2011 cropping year.
The results in this paper suggest that for Western Canadian canola producers,
there is potential complementarity for some BMPs in terms of improving technical
efficiency while simultaneously advancing environmental stewardship. This study
extends the limited literature that combines stochastic production frontier analysis with
flexible risk specifications to incorporate environmental stewardship practices in the
inefficiency model.