Evaluation of cost efficiency in tomato greenhouses: the case of seven agrobussines in México, 2016

Marisol Arvizu ARMENTA


Aim: The main objective of this research was to evaluate the efficiency of economic costs in seven units of greenhouse tomato production, during the production cycles of 2016, through the application of the stochastic frontier, depending on the type of packaging they handle and the cost structure that governs them.


Design / Research methods: The stochastic frontier model includes the analysis of the non-systematic random component, which assumes an extremely critical role in the analysis during the interpretations. With the calculation of the stochastic cost frontier we construct the cost inefficiency index represented by C_it, delimited below 0. The index shows the percentage in which the cost is exceeded and, therefore, the degree of inefficiency.


Conclusions / findings: The elaboration of the stochastic frontier finds its justification in the argument that the less efficient competitor is the one that receives the greater effects of the competition. In this sense, the location of the companies analyzed with respect to their own line of efficiency is essential for the design of the strategies of each company. The production units analyzed showed that, on some occasions, externalities are the cause of inefficiency, but contrary to what is established in theory, there are some units that show that the inefficiency with which they count is diminished by The influence of uncontrolled variables.


Originality / value of the article: The contribution of this research lies in the use of efficiency models in the primary sector, specifically in tomato´s greenhouses.


Stochastic Frontier Model, Efficiency in Costs, tomato´s Greenhouses

Full Text:



Aigner D.J., Lovell C.A.K., Schmidt P. (1977), Formulation and estimation of stochastic frontier production function models, „Journal of Econometrics”, vol. 6 no. 1, pp. 21-37.

Asmild M., Hougaard J.L. (2006), Economic versus environmental improvement potentials of Danish pig farms, „Agricultural Economics”, vol. 35 no. 2, pp. 171-181.

Ayoola J.B. (2014), Comparative economic analysis of tomato (Lycopersicum esculenta) under irrigation and rainfed systems in selected local government areas of Kogi and Benue, Nigeria. „Journal of Development and Agricultural Economics”, vol. 6 no. 11, pp. 466-471.

Bateman I.J., Brouwer R., Davies H., Day B.H., Deflandre A., Di Falco S. et al. (2006), Analysing the agricultural costs and non-market benefits of implementing the Water Framework Directive, „Journal of Agricultural Economics”, vol. 57 no. 2, pp. 221-237.

Batesse G.E., Coelli T.J. (1995), A model for technical inefficiency effects in a stochastic frontier production function for panel data, „Empirical Economics”, vol. 20, pp. 325-332.

Benach A.L. (2005), Estudio para la definición de la Estructura de Costos de Producción Agrícola de Arroz en Costa Rica, Instituto de Investigaciones en Ciencias Económicas, Universidad de Costa Rica [unpublished work].

Bojnec S., Latruffe L. (2011), Farm size and efficiency during transition. Insights from Slovenian farms, „Transformations in Business and Economics”, vol. 10 no. 3, pp. 104-116.

Calvin L., Cook R. (2005), North American greenhouse tomatoes emerge as a major market force, „Economic Research Service”, April, https://www.ers.usda.gov/amber-waves/2005/april/north-american-greenhouse-tomatoes-emerge-as-a-major-market-force/ [08.09.2018].

CIA ( 2017), The world factbook. Field listing: exports – commodities, https://www.cia.gov/library/publications/the-world-factbook/fields/2049.html [08.09.2018].

Cook R.L., Calvin L. (2005), Greenhouse tomatoes change the dynamics of the North American fresh tomato industry, Economic Research Report no. 2, United States Department of Agriculture, http://ucce.ucdavis.edu/files/datastore/234-447.pdf [08.09.2018].

Davidova S., Latruffe L. (2007), Relationships between technical efficiency and financial management for Czech Republic farms, „Journal of Agricultural Economics”, vol. 58 no. 2, pp. 269-288.

Dodson M., Bachmann J., Williams P. (2002), Organic greenhouse tomato production. appropriate technology transfer for rural areas, www.attra.ncat.org [08.09.2018].

Engindeniz S., Tuzel Y. (2006), Economic analysis of organic greenhouse lettuce production in Turkey, „Scientia Agricola”, vol. 63 no. 3, pp. 285-290.

FAO (2018), FaoStat, http://www.fao.org/faostat/en/#data/QC [08.09.2018].

FIRA (2016), Panorama agroalimentario tomate rojo, Dirección de Investigación Económica y Sectorial, https://www.gob.mx/cms/uploads/attachment/file/200635/Panorama_Agroalimentario_Tomate_Rojo_2016.pdf [08.09.2018].

Gorton M., Davidova S. (2004), Farm productivity and efficiency in the CEE applicant countries. A synthesis of results, „Agricultural Economics”, vol. 30 no. 1, pp. 1-16.

Hung-Jen W., Ching-Chieng Ch., Po-Chi Ch. (2008), The cost effects of government subsidised credit. Evidence from farmers credit unions in Taiwan, „Journal of Agricultural Economics”, vol. 59 no. 1, pp. 132-149.

Henao M. (2001), Evaluación y caracterización morfológica del Lulo (Solanum quitoense). Tesis de ingeniero agronomo, Universidad Nacional de Colombia, Medellin [unpublished work].

Ibitoye S.J, Shaibu U.M., Omole B. (2015), Analysis of resource use efficiency in tomato (Solanum lycopersicum) production in Kogi State, Nigeria, „Asian Journal of Agricultural Extension, Economics & Sociology”, vol. 6 no. 4, pp. 220-229.

Kido-Cruz M., Kido A. (2007), Análisis comparativo de costos para el manejo y uso de suelo en la cuenca alta del río Caculta en Oaxaca, México, „Agrociencia”, vol. 41, pp. 355-352.

Kvaløy O., Tveteras R. (2008), Cost structure and vertical integration between farming and processing, „Journal of Agricultural Economics”, vol. 59 no. 2, pp. 296-311.

Laurinavičius E., Rimkuvienė D. (2017), The comparative efficiency analysis of EU members agriculture sectors, „Rural Sustainability Research”, vol. 37 no. 332, pp. 10-19.

Meeusen W., Van Den Broeck J., (1977), Efficiency estimation from Cobb-Douglas production functions with composed error, „International Economic Review”, vol. 18 no. 2, pp. 435-444.

Mysore S., Wen-fei L.U. (2002). International competition in the greenhouse production of floriculture products – lessons for New York and India, Staff paper, Department of Agricultural, Resource and Managerial Economics, Cornell University, Ithaca NY, http://publications.dyson.cornell.edu/research/researchpdf/sp/2000/Cornell_Dyson_sp0004.pdf [08.09.2018].

Pindyck R., Rubinfeld D. (2009), Microeconomía, 7th ed., Pearson, Prentice Hall.

Rasmussen S. (2010), Scale efficiency in Danish agriculture. An input distance-function approach, „European Review of Agricultural Economics”, vol. 37 no. 3, pp. 335-367.

Reyes H.M. (1995), Investigación agrícola, costo de la semilla mejorada y tasa de interés como instrumentos para el logro de la autosuficiencia alimentaria. El caso del maíz en Guatemala, 1975-90, Instituto de Ciencia y Tecnología Agrícolas, Guatemala.

Rucoba García A. et. al (2006), Análisis de la rentabilidad de un sistema de producción de tomate bajo invernadero en la región centro sur de Chihuahua, „Revista Mexicana de Agronegocios”, vol. 10 no. 19, pp. 1-10.

Sánchez López E., Barrera Serrano M.J., Zavala J. (2004), Análisis del costo de producción del algodón 2001 en Mexicali Baja California, como un elemento de diseño de política de apoyo al subsector, „Revista Mexicana de Agronegocios”, vol. 8 no. 14, pp. 198-210.

Stevenson Rodney E., (1980), Likelihood functions for generalized stochastic frontier estimation, „Journal of Econometrics”, vol. 13 no. 1, pp. 57-66.

StataCorp (2015), Stata Statistical Software. Release 14, StataCorp LP, College Station, TX.

Torres Lima P. et al. (2004), Evaluación de la rentabilidad del desarrollo regional. El marco de la agricultura, „Región y sociedad”, vol. 16 no. 29, pp. 109-144.

USDA (2016), Tomato report. Mexico continues to expand greenhouse tomato production, GAIN Report MX6021, https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Tomato%20Annual_Mexico%20City_Mexico_6-1-2016.pdf [08.09.2018].

Vasiliev N., Astover A., Mõtte M., Noormets M., Reintam E., Roostalu H. (2008), Efficiency of Estonian grain farms in 2000-2004, „Agricultural and Food Science”, vol.17 no. 1, pp. 1-40.

DOI: http://dx.doi.org/10.29015/cerem.576


  • There are currently no refbacks.

Copyright by Wyższa Szkoła Bankowa we Wrocławiu


Wyższa Szkoła Bankowa we Wrocławiu

ul. Fabryczna 29-31
53-609 Wrocław

The Central European Review of Economics and Management

ISSN 2543-9472

eISSN 2544-0365


Zeszyty Naukowe Wyższej Szkoły Bankowej we Wrocławiu (WSB Research Journal)

ISSN 1643-7772
eISSN 2392-1153