Relationship between honey market structure and technical efficiency in honey production units in Iran

Honey is a healthy, nutritious and natural food that contains minerals, enzymes, and vitamins that give a person nutritious and organoleptic properties. It is produced on all five continents and its consumption varies from country to country due to cultural reasons and eating habits (FAO, 2022). Honey production in the world has increased from 771,114 tons in 1971 to 1,770,119 tons in 2020, with an annual growth rate of 1.84 percent (Knoema, 2022). Honey plays an effective role in ensuring global food security, and its market structure is dictated by its production efficiency. Given the limited resources of the agricultural sector, the optimal use of natural resources by improving technological efficiency in honey production would help ensure sufficient food for the increasingly growing world population (kavand et all., 2014; Hosseinzad & Koopahi, 1999). One of the factors affecting the efficiency of honey production is competitive and efficient markets. Therefore, the main objective of the present study is to determine the structure of the honey market in the provinces that produce this product and its relation to the technical efficiency of the producers.

This study uses the Herfindahl-Hirschman index (HHI) to study the market structure of honey-producing provinces in Iran. The Herfindahl-Hirschman index is calculated by squaring the market share of each competing production unit in the industry and then summing the resulting numbers. For this purpose, two different scenarios are considered. In the first scenario, the HHI was calculated based on the share of production of the counties and in the second scenario, it was calculated based on the number of apiaries in each county. To estimate the technical efficiency, the stochastic frontier Cobb-Douglas production function was used. For this purpose, first, the HHI values were considered as inefficient function variables and then the inefficiency function along with the Cobb-Douglas frontier function using maximum likelihood method was estimated and the technical efficiency values of the provinces were calculated. The data used in this study for 2019-20 have been obtained from the results of the census of Iranian apiaries. Excel2013 software was used to calculate Herfindahl-Hirschman index values and Stata15 software was used to estimate the Cobb-Douglas stochastic frontier production function.

Our findings show that the mean value of the Herfindahl-Hirschman index based on the first scenario in 2019 is 0.23 and in 2020 is 0.24. Therefore, Iran’s honey market during the studied years turns out to be monopolistic competition. The mean value of the Herfindahl-Hirschman index according to the second scenario for 2019 and 2020 was calculated as 0.16 and 0.17, respectively, which indicates that the country's honey market was competitive during the years under review. According to the results of Cobb-Douglas Stochastic frontier production function, inputs including; apiary, labor and hive have a positive and significant impact on honey production. The average efficiency during 2019-20 according to the first scenario is 61.2% and according to the second scenario is 64.2%. According to the first and second scenarios, it is possible to increase the efficiency by 38.8% and 35.5%, respectively. The results of the inefficiency function also confirmed that increasing the value of the Herfindahl-Hirschman index (i.e. increasing the degree of monopoly and distance from the competitive market) has a positive effect on inefficiency (negative effect on efficiency).

In conclusion, the results indicated that Iran’s honey market in recently years was has changed to monopolistic situation. This event has caused to decrease the efficiency of apiaries. So it can be possible to increase the efficiency of apiaries through stablishing competitive structure in honey market. In this case motivating for investment in modern production technologies and related industries can help to competitive circumstances in the honey market. market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency market structure and technical efficiency