Diversification economies and specialisation efficiencies in a mixed food and coffee smallholder farming system in Papua New Guinea
Smallholder farming systems in Papua New Guinea are characterized by an integrated set of cash cropping and subsistence food cropping activities. In the Highlands provinces, the subsistence food crop subsystem is dominated by sweet potato production. Coffee dominates the cash cropping subsystem, but a limited number of food crops are also grown for cash sale. The dynamics between subsystems can influence the scope for complementarity between, and technical efficiency of their operations, especially in light of the seasonality of demand for household labour and management inputs within the farming system. Farm survey data collected in the Benabena district of the Eastern Highlands Province were used to derive technical efficiency indices for each household. A stochastic input distance function approach is used to establish whether diversification economies exist and whether specialization in coffee, subsistence food or cash food production influences the technical efficiency on the sampled farms. Diversification economies are weakly evident between subsistence food production and both coffee and cash food production, but diseconomies of diversification are discerned between coffee and cash food production. Significant technical efficiency gains are made from diversification among broad cropping enterprises (subsystems). From abstract Elsevier Science Journal.