Technical efficiency of abaca stalk production in Aklan, Philippines: Evidence from a one-step stochastic frontier model

Abstract

Abaca, one of the country’s significant sources of export earnings, remains the Philippines’ most important natural fiber crop and a key source of livelihood for rural households, particularly in major producing areas, including Aklan. Despite its economic importance, abaca production continues to operate below potential, indicating technical inefficiency among producers. Focusing on the stalk production stage, this study estimates technical efficiency and identifies the factors influencing inefficiency among producers in Aklan province. A total of 369 abaca producers were randomly selected using a multi-stage sampling technique. A single-step stochastic production frontier analysis was employed to simultaneously estimate the production function and inefficiency effects. Results reveal that abaca producers are, on average, 87.23% technically efficient, suggesting that output could still be increased by 12.77% through improved input utilization and technology adoption. Factors such as farmers’ age, household size, education, farming experience, and farm distance to market were found to significantly influence technical inefficiency. The estimated returns to scale of 0.424 demonstrate decreasing returns to scale in abaca stalk production. These findings highlight the need for targeted policy and program interventions focused on productivity enhancement and integrated support mechanisms, particularly through strengthening farmer capacity-building initiatives, improving institutional support, and strengthening public investment in market access.