Measurement of economic of wheat farms in Radhwaniya Area

I. Introduction

The cereals in general and wheat in particular are of great importance in the world because of their direct association with the basic needs of the population. In addition to the relative importance it occupies in terms of cultivated area and production, as well as its role in achieving the food security of the population. Wheat is one of the most important agricultural products in human life during different times of civilization. It is cultivated in all countries of the world as a food source for people and enters into a number of important industries. This crop is a component of stability and international security in most cases. Therefore, many peoples of the world have taken a policy of self-sufficiency from this strategic crop, which controls its trade monopoly countries, which impose indirect economic and political control on many countries that lack this crop to cover the need for domestic consumption of their peoples. Wheat is one of the most important strategic food crops in the world also it ranks first in world cereal production, the wheat yield represents 38.16% of the agricultural production of cereals while in Iraq it contributed in agricultural production by (47.67%) (Aldulaimi, 2005). Wheat is also an important economic crop because it is a strategic crop that contributes to food security and has a significant impact on the trade balance. The average wheat production in Iraq during the period 1980 -2013 was about 1550 tons (Fawzi 2014.). The efficiency can be defined as "the ratio between the total means and the effort used in the activity on the one hand and the actual use that represents the value of use on the other," as defined (Quraishi and Al Haj, 2012) the efficiency as "work to achieve the parity in the thing or work to be achieved," This is reflected either to achieve the maximum output of specific inputs or to achieve specific outputs at the lowest inputs, also it was defined by another researcher As "the ability to maximize value and reduce costs" (Arhoma and Meftah, 1996). Efficiency cannot be achieved only in the case of cost reduction or value raising. Both objectives must be achieved together. Efficiency also reflects the rational and rational use of the trade-off between alternatives and the choice of the best in a way that allows to reduce costs or maximizing profit to the maximum extent possible, when choosing a practical method to reach the object, that efficiency in this sense means "doing the best possible way in cost, time and profitability."

Research problem:

Despite the economic and nutritional importance of the wheat crop and the support provided by the state, however, there is a shortage of wheat cultivation on two levels. First level: the fluctuation of cultivated areas from one year to another and this is reflected in the fluctuation of production and low levels and therefore there is a deficit to fill the demand and resort to Imports. The second level is the low rate of productivity which may be attributed to the inefficient use of resources and their scientific blending, which makes wheat farms inefficient.

Study objectives:

The research aims to: 1. Identify the reality of Iraqi wheat production. 2. Measuring economic efficiency and its technical and customized branches.

The study hypothesis:

The research assumes that there are administrative factors that differ from farmer to farmer, although the same resources were reflected in the low efficiency and made the sample generally not achieved a level of efficiency.

Data sources and analysis method:

To achieve the objectives of the research questionnaire was distributed to a sample of wheat farmers in the province of Baghdad -the Radhwaniya district of 49 farmers and collected randomly. A quantitative approach based on linear programming was adopted, namely the method of data envelopment analysis method and the Distributed Evolutionary Algorithms in Python (DEAP) program.

II. Results and discussion

First: The reality of wheat production in Iraq for the period 1990-2016 . Reference: by students based on data from the doctoral thesis of researcher Omar Abdel Jasim. Reference: by students based on data from the master thesis of researcher Omar Khdaer.

Measurement of economic of wheat farms in Radhwaniya Area

Figure (2)

The area, production and productivity of wheat in Baghdad governorate for the period 1990-2016. Characterization is the first step that is initiated when trying to study any relationship between several variables. Therefore, this step is the most important steps by which the relationship between variables is formulated in a mathematical way to obtain the model by which the phenomena are applied in practice. This step is called the confirmed hypotheses and this step requires determining the dependent variable and the independent variables. The theoretical previous expectations which are theoretical parameters on which they are based when evaluating model estimation results. It also requires determining the mathematical form of the model in terms of the number of equations and their properties, whether linear or nonlinear, and because the model DEA is a nonparametric mathematical method, it depends on linear programming methods and provides an objective evaluation of the efficiency of several enterprises (Ajao.2013).

Second. Economic efficiency and its components

Two of these models for measuring efficiency as mentioned above depend on the stability of the return of the volume of production, ie, any change in the quantity of production factors used by the establishment have a constant effect on the quantity of production. This feature is suitable only when all the establishments are in comparison with their optimal size and then the exclusion of this model in the application because in fact there are many obstacles, especially in agriculture, which prevent agricultural enterprises from achieving these sizes such as incomplete competition and funding constraints. The use of the CRS assumption results in a confusion between technical efficiency and volume efficiency indicators.

Therefore, the return to scale of production (constant, diminishing, decrease) is used to separate the effect of technical and volume efficiency, ie, if the quantity of production factors increases by a certain percentage leading to a greater or lesser increase or equal in the volume of production. This adjustment is made by adding a constraint of N1 = 1, although this limitation may be insignificant in the long term (Coelli.1996).

In order to estimate the technical efficiency and estimate by the input to consider that the environmental conditions surrounding the farm make the farmer control his inputs more than his control in increasing the production in the sense that the inputs and them costs can be reduced more than the guarantee of increased production, and when there is statistical data in the field which represented by (K) of inputs, which included (the quantity of seeds / kg, quantity of fertilizers / kg, hours of manual labor /hour, area / donum) which are independent variables which prove to be the most important group of inputs that can affect the dependent (M) factor that represented the wheat production in tons for sample farms (N).

We make X i the input value, Y i the output value, i the farms and X the input matrix, K * N, Y the output matrix M * 1 and using Duality in linear programming, the DEA form becomes the used in terms of input and assuming VRS as follows (Abul issa, 2005). Subject to :

As θ represents the measurement of (TE) technical efficiency of farm (Daoud.2007), The scale efficiency of farms (SE) require technical efficiency measurement under constant and variable return of capacity, For TE and AE efficiency and cost efficiency, production factors (PXS) prices were used in accordance with cost reduction assuming variable volume returns. This means the technical efficiency is calculated once to measure the scale efficiency and time to measure the customization efficiency ( Vecente 2004 .) Customization efficiency is calculated by AE = EE / TE .While the economic efficiency is calculated by multiplying the Customization efficiency by technical efficiency (Ali, 2014.)

The results of the estimation of economic efficiency levels and their components by DEA method:

After the characterization and formulation of the model and the adoption of the study on the model of variable size returns with an objective approach to measuring the efficiency of farms because these farms did not reach their optimal economic size and adoption of this model means the possibility of increasing the output while maintaining a certain level of production factors and has been adapted to the data envelopment analysis program DEAP ver2.1Data Envelopment Analysis Charnes.11996).

The technical results indicate that the technical efficiency of the return of the capacity return was 46%. The technical efficiency of the change in yield was averaging 56%. This means that the farmers are moving away from the optimal production by 44%, which means that they can produce current production using only 56% of the current resources. . While the scale efficiency reached 86% at the sample level. However, the size yield indicates that most farmers are working with increasing returns to scale. Reference: by students using DEAP prog.

Allocative efficiency and economic efficiency:

In order to calculate the allocative efficiency and the technical efficiency was calculated once again to calculate the economic efficiency which is the result of the multiplication by using the same resources that were used by calculating the technical efficiency which included the seeds, fertilizers, pesticide and area plus the prices of those resources and estimated by the same program and the results of which are explained in Table (4) that allocative efficiency was at the sample level 0.43, which means that there is a waste of resources of 57%.

While The economic efficiency, which combines the technical and allocative efficiency, which reached 24%, indicates that farmers can produce the current amount of production using 24% of the cost, ie, the producers do not produce using the optimal quantities, and therefore their mixture is not economically and therefore their production level below the level of efficiency.

III. Conclusions and recommendations

We conclude from the study:

The values of cultivated area, production and productivity were volatile despite the existence of a clear policy to support the crop by receiving the quantities produced at subsidized prices and the reason may be due to the presence of factors other than price such as possession and size as well as some administrative procedures in the marketing process. 2. Farmers of the research sample were able to achieve an acceptable level of technical efficiency, but when calculating prices and technology, their economic efficiency decreased to 24%, which indicates the weakness of the administrative capabilities of farmers and there are difficulties hindering the scientific use of resources.