Performance Measurement of Agricultural Cooperatives in Thailand: An Accounting-Based Data Envelopment Analysis

Despite the emergence of industrialisation, the agricultural sector still plays a prominent role both in the Thai economy and social development. As indicated by the National Statistical Office (2006), around 57% of the total population relies on the agricultural sector in Thailand, while the contribution of the agricultural sector to gross domestic product has gradually decreased (Office of the National Economic and Social Development Board 2005). This implies that the more the Thai economy progresses, the more the productivity inequality between the conventional and modern sectors increases. It has long been a critical question for policy makers to choose the appropriate direction of development planning to improve the above situations through many measures and interventions on the sector in Thailand. The primary purpose of this study is to measure and investigate factors influencing Thai agricultural cooperatives’ technical efficiency including its pure technical and scale efficiencies in 2004. The study was an application of a data envelopment analysis approach in order to estimate technical efficiency, based on the financial statements of agricultural cooperatives in Thailand, and also to investigate the determinants of the efficiencies among different management policies and operation environments. The empirical results of technical efficiency and influencing factors are necessary for policy makers and cooperatives’ stakeholders to enable them to choose the appropriate direction of development planning to improve the performance of agricultural cooperatives and the Thai economy. This paper is organized into five sections. Following this introduction, the analytical framework is explained. Next, data are described. The last two sections cover the empirical findings of this study, and conclusions and policy implications.