Abstract

The paper estimates Total Factor Productivity (TFP) growth in six agro-economic zones of Northern Thailand covering a 23 year period (1977 to 1999) and tests convergence amongst regions using a stochastic production frontier approach. Results revealed that all the inputs excluding fertilizer significantly contribute to agricultural productivity. Increasing returns to scale prevail in these regions. Land, labor, irrigation and loan capital have substitution relationships but all are within the inelastic range. The mean technical efficiency level is low (0.88). The overall TFP declined slightly due to technical regress and modest improvement in technical efficiency change over time. However, convergence in productivity has been reached in all regions towards the end. The government’s initiative to support investment through Bank of Agriculture and Agricultural Cooperative loan had a significant influence on technical efficiency improvements. Policy implications include provision of capital through loan, investments in irrigation, and proper functioning of land and labor markets to improve agricultural productivity.

Key words:  Thailand, stochastic production frontiers, total factor productivity growth, convergence, technical efficiency change, technical change, agro-economic zone.