ECONOMIES OF SCOPE AND SCALE EFFICIENCY GAINS DUE TO DIVERSIFICATION

Using a nonparametric linear programming approach, our contribution is to examine if efficiency gains in Western crop production are realized due to diversification and to demonstrate that the diversification efficiency gains realized are a product of economies of scope efficiency gains and scale efficiency gains. The analysis employed cropping sector data for six major crops for the period, 1975-1996. Results indicate efficiency gains are realized due to diversification for all the two-crop combinations.