Technical efficiency and production risk of cold-water fish farms in the Kamyaran County

Production risk and its impact on the efficiency of production units is one of the main issues in the farm management. This study reviews the relationship of technical efficiency with production risk of fish farms in the Kamyaran County. Required data questionnaires were collected from 55 farms in the Kamyaran. To achieve objective, study employed the stochastic frontier model where the production functions, risk and technical inefficiency is estimated simultaneously. Results showed that fish production is significantly influenced by labor, fry and feed. Feed and fry are found to be risk- increasing inputs and labor is revealed to be a risk- reducing inputs. Furthermore, it is revealed that labor, experience, member of the cooperative and frequency of participation in training significantly decreases technical inefficiency of farmers. CONCULUTION: The estimated technical efficiency showed that efficiency score (73%) is overstated when the estimating function is modeled without the risk component. Therefore it would be better that in measuring of farm efficiency we also consider the farm production risk.