Rural Reform and Fiji's Indigenous Sugarcane Growers: An Application of Stochastic Frontier Analysis

Abstract

We examine the performance of Fiji's indigenous sugarcane growers, measuring their technical efficiency using a stochastic frontier production function. Of particular interest are the cooperative or communal farming structures among new entrants into Fiji's sugar industry. These structures are emerging in response to government rationalisation policies in agricultural support-from individuals to groups-and the growing emphasis from the indigenous community on economic activity to reflect community requirements, values and imperatives. Our study finds that growers who are members of a cooperative group have higher levels of technical efficiency than growers who live in villages and that their performance is on par with galala or independent growers. Group structures are used as vehicles to centralise management decision-making and pool resources, thereby overcoming experience and capital accumulation constraints. The research also shows that these structures provide a vital mechanism for aligning cultural values and legitimising individual economic activity that has communal benefits. This finding is not only important for Fiji's struggling agricultural sector, it points a way forward for other South Pacific island nations and other countries where agricultural intensification is carried out on communally owned land.