Technical Inefficiency in Paddy Rice Production in Laos

This study uses the stochastic production frontier and inefficiency models to examine paddy rice production in Laos and identify the factors hindering its efficiency. Based on cross-sectional data from 343 farm households in the country, key inputs such as farmland, labour, capital, water supply and other expenses are analysed in the production model. Similarly, the impact of specific factors like farmers' education, soil quality, credit access, extension services, and environmental conditions are examined in the inefficiency model. The results show that the potential of 77.75 per cent of Laos' paddy rice output has been realized and that knowledge transfer among farmers - via rice association membership and training - is the most effective way to improve efficiency. Another important finding is that public extension services and disaster management mechanisms need more attention.