Environmental Efficiency Analysis of Rice Farms in Guilan Province with Emphasis on Material Balance Condition

The overuse of fertilizers in recent years has led to the production of harmful agricultural products and environmental pollution. Studying the environmental efficiency of agricultural activities and transferring the results of these studies to farmers and making practical use of them is one of the important strategies that can have a significant impact on the production of healthy products with less negative impacts on the environment. The main objective of this research is to measure the technical and environmental efficiency of rice farms in Guilan province. Previous studies in agriculture sector considered pesticides and fertilizers as undesirable inputs in the environmental model but considering undesirable outputs as inputs leads to an unbounded PPS, which is not rational from an economic perspective. So in this study, the nutrient surplus (nitrogen and phosphorus surplus) from rice fields, caused by overuse of chemical fertilizer, was considered as an undesirable product in the environmental model.

The presence of outliers in the dataset may bias efficiency estimates: this could make the results meaningless and misleading. The data cloud method is useful in identifying and removing outliers in the data, thus leading to more accurate efficiency estimates. Therefore, at first, farms that were identified as outliers were deleted from the sample. Then the nitrogen and phosphorus surplus were calculated by material balance condition and farms with negative or zero NS and PS were removed from sample, then the remaining farms were used to estimate the technical and environmental efficiency. To determine efficiency, the directional output distance function method was used. In this method, it is assumed that undesirable output is produced along with the desirable output and that means maximizing optimum output while reducing undesired output. The required data were collected by questionnaires from 427 Rice farmers.

The results indicated that the amount of nitrogen and phosphorus surplus in rice farms of Guilan province were 44.63 and 14.31 kg/ha, respectively. Therefore, if rice farmers continue to use current levels of nitrogen and phosphorus fertilizers, environmental problems caused by NS and PS would increase.The average technical efficiency of farmers in constant and variable returns to scale is 59 and 69 percent, respectively. So, it is possible to improve the efficiency of rice farms. In other words, the technical efficiency of farms under assumption of CRS and VRS can be improved 41% and 31%, respectively, through increasing output. The average environmental efficiency was 52%, it indicates that environmental efficiency is low. So according to the directional nutrients efficiency measure, rice farmers can increase their rice production and reduce environmental pollution simultaneously.Based on the results, environmental efficiency of farmers is lower than technical efficiency and there is a significant difference between the average efficiency with regard to nutrient surplus and without it, so if the nutrient is not considered in the model the efficiency score is estimated more than the actual value by 17%. The results also showed that almost 82% of these rice farmers are technically inefficient and 85% are environmentally inefficient. Spearman correlation coefficient between technical and environmental efficiency was 0.772. This indicated there is a positive relationship between these two kinds of efficiency and units with high technical efficiency also have high environmental efficiency.

One of the reasons for over usage of fertilizers and neglecting chemical fertilizer damages by farmers is that most farmers cultivate rice based on past experiences and they are more concerned with the economic aspect of production and not considering the external effects of increasing production methods. Lack of facilities and appropriate market for introducing and supplying healthy crops and the absence of appropriate agricultural policies are major obstacles to producing healthy crops that leads to continued usage of conventional production methods and the inadequate consumption of pesticides and fertilizers. So controlling fertilizer usage in farms, encouraging the consumption of healthy products, establishing training classes for farmers and raising their awareness about dangers of overuse of chemical fertilizers are essential for improving the environmental efficiency of Rice farmers in Guilan province.