Efficiency and farm size in Western Cape grape production : pooling small datasets

Abstract

A stochastic frontier is fitted to two panels of wine grape farms (34 in Robertson and 36 in Worcester) for 2003 and 2004 and a cross section of 37 table grape farms in De Doorns for 2004 only. The panel of wine grape farms is the best model as tests show that De Doorns is different. Output is explained by land, labour and machinery and efficiency is affected by labour quality, age and education of the farmer, location, the percentage of non-bearing vines and expenditures on electricity for irrigation. There is evidence of a small degree of increasing returns to scale.