Southeastern Peanut-Production Cost Efficiency Under the Quota System: Implications for the Farm-Level Impacts of the 2002 Farm Act

Abstract

In the article, stochastic frontier analysis of peanut-production efficiency in the Southeastern region of the United States is conducted with a view of assessing the likely farm-level impacts of the 2002 Farm Act. Results indicate that, although quota ownership did not significantly impact inefficiency, it is likely that limitations on the quota's transferability to areas with better growing conditions were a significant cause of inefficiency. The acreage shifts and improved yields following the passage of the 2002 Farm Act support this conclusion. Certain farm characteristics, such as farm size and operator's education and age, were also important for efficiency.