An examination of economic efficiency of Russian crop production in the reform period

This article examines economic efficiency (EE) of crop production of Russian corporate farms for 1993-1998. EE declined over the period, due to declines in both technical and allocative efficiency. Technical efficiency (TE) results indicate that output levels could have been maintained while reducing overall input use by an average of 29-31% in 1998, depending on the method used, while the allocative efficiency (AE) results show that costs could have been reduced about 30%. The EE scores show that Russian corporate farms could have increased efficiency by reducing the use of all inputs, particularly fertilizer and fuel. Russian agriculture inherited machinery-intensive technology from the Soviet era, which may be inappropriate given the relative abundance of labor in the post-reform environment. Investment constraints have prevented the replacement of old machinery-intensive technology with smaller scale machines that allow for a more labor-using technology. Copyright 2006 International Association of Agricultural Economics.