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The Efficiency of Labor Input in the Tree Nut Growers Industry: A Stochastic Frontier Production Approach Study in Butte County, California

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  • Chang, Kuo-Liang
  • Lone, Todd A.

Abstract

The U.S. government recruits immigrant workers through the H-2A program as a short-term solution to the agricultural sectors’ labor shortage problem. Although the sector insists hiring immigrant workers is essential for their survival, history has proven the socio-economic cost for doing so is enormous. This paper aims to investigate the contribution of labor to agricultural production efficiency. A discussion of marginal rate of technical substitution, economies of scale, and economies of scope will also be included. The stochastic production frontier regression approach was applied to input/output data collected from a survey of tree nut growers in Butte County, California. Results indicate the labor input is not significant in deciding farm production efficiency. Instead of attempting to increase short-term labor, producers’ and policy makers’ efforts should be directed toward improving the logistics of farm management and the quality of labor, thus more efficiently utilizing available resources.

Suggested Citation

  • Chang, Kuo-Liang & Lone, Todd A., 2010. "The Efficiency of Labor Input in the Tree Nut Growers Industry: A Stochastic Frontier Production Approach Study in Butte County, California," 2010 Annual Meeting, February 6-9, 2010, Orlando, Florida 56335, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea10:56335
    DOI: 10.22004/ag.econ.56335
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    References listed on IDEAS

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    1. Dawn Thilmany & Steven C. Blank, 1996. "FLCs: An analysis of labor management transfers among California agricultural producers," Agribusiness, John Wiley & Sons, Ltd., vol. 12(1), pages 37-49.
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    3. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    4. Paul Bishop & Steven Brand, 2003. "The efficiency of museums: a stochastic frontier production function approach," Applied Economics, Taylor & Francis Journals, vol. 35(17), pages 1853-1858.
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