MARKET ASSISTED LAND REFORM IN NE BRAZIL: A STOCHASTIC FRONTIER PRODUCTION EFFICIENCY EVALUATION

We evaluate the "Cédula da Terra" Pilot Project, a land reform project whose conception, mechanisms and operational structure is different from traditional agrarian reform based on expropriation. The land distributed by the project, is first acquired by the agricultural producers associations, and a given set of incentives is established to obtain a better efficiency use of resources. The main objective of this article is to characterize the sources of technical and allocative inefficiency from a cross section of 309 beneficiaries from five states in NE Brazil. We estimated a potential production frontier following the methodology of BATTESE and COELLI (1995), using the software FRONTIER 4.1. (Tim COELLI, 1996). The main conclusion is that technical assistance, human capital (years of schooling) and better access to credit reduce inefficiency, or thus increase technical and allocative efficiency of the beneficiaries.