Most studies on the impact of specialization on technical efficiency regress the technical efficiency scores obtained from a standard stochastic frontier model on a specialization index using one- or two-stage procedures ( Coelli and Fleming, 2004 Rahman and Rahman, 2008). To the best of our knowledge no studies in West Africa explore the direct impact of horizontal crop choice strategies on producers' multi-output performance. Overall, the direction of the effect of diversification on the economic performance of a decision-making unit cannot be determined solely on theoretical grounds, but the issue can be examined empirically, in the specific context of a production environment. Contrarily, specialization in the production of a small number of crops allows operators to exploit scale economies and provides them with better opportunities to fine-tune their skills ( Oude Lansink and Stefanou, 2001). As such, diversification allows for more efficient use of inputs that can be used in different production processes ( Teece, 1980). For example, in some periods of the year, low revenues from traditional vegetables may be counterbalanced by relatively high revenues from non-traditional vegetables.Īnother benefit associated with diversification is the complementary use of inputs on the farm (economies of scope). By producing both categories of crops instead of only one, the farm may be able to reduce risk. In Benin's vegetable sector, a large majority of farms produce both traditional and non-traditional vegetables, indicating that multi-output farms are the rule rather than the exception. As fresh vegetables are characterized by high elasticity of demand, there is overwhelming evidence that vegetable production can contribute importantly to economic growth and food security ( Weinberger and Lumpkin, 2007 Ali, 2008 Haji, 2008 Keatinge et al., 2011). Vegetables in West Africa are an important crop and its importance is increasing over time. Additionally, to reduce poverty and secure food needs in this region, there is a growing interest of diversifying production toward higher-value outputs. It is worth noting that Sub-Saharan African countries are categorized as agriculture-based countries in which agriculture contributes approximately one third of overall GDP ( Byerlee et al., 2009). This suggests the need for a more selective strategy that can help increase the competitiveness of agriculture and the viability of small-scale farms in the region. The main cause of the low levels of agricultural productivity in this region is the ineffective establishment of agricultural R&D institutions to sustain productivity growth ( Feder et al., 1985 Binswanger, 1986 Jack, 2013 Reimers and Klasen, 2013 Mekonnen, 2017). However, Sub-Saharan African countries are still far behind ( Fuglie, 2008 Chavas, 2011). Over the last four decades, agricultural productivity has been growing at fairly high rates in most regions of the world, reflecting the important role played by innovations in agriculture. From a policy perspective, the findings imply that policies to encourage specialization may lead to higher performance. However, the degree of specialization has a positive effect on technical efficiency. The technology is found to exhibit no economies of scope, indicating that vegetable producers have no incentive for specialization or diversification. In this study, we also control for spatial heterogeneity of vegetable production by including a soil fertility variable in the production function at the farm level. A derivative-based measure of economies of scope is obtained by exploiting the duality between the shadow cost and the input distance functions. Specialization is assumed to have an effect on the production frontier itself, as well as on the distance of each producer's observed data to this frontier (technical efficiency).
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