Research Article
BibTex RIS Cite

Evaluating Technical Efficiency of Turkish Sugar Production in Pre and Post Privatization Periods

Year 2021, , 59 - 78, 25.01.2021
https://doi.org/10.17233/sosyoekonomi.2021.01.03

Abstract

The sugar production sector of Turkey has undergone a large-scale privatization in 2018. Since then, 10 out of 33 sugar factories have been privatized. The objective of this research is to investigate the effects of the privatization on the technical efficiency of the sugar factories. For this purpose, the data of 31 factories operating in different parts of the country are utilized. We evaluate the efficiency before and after privatization in two periods: pre-privatization (September 2017 - August 2018) and after-privatization (August 2018 - September 2019) using Data Envelopment Analysis, Malmquist Productivity Index and DEA by Sequential Exclusion of Alternatives methods. First, while results derived from all models reveal a technical efficiency decline among factories in general, the privatized factories stand out as the only subset that experience an increase in technical efficiency for the period analysed. Secondly, the benchmarks for the inefficient factories are identified in the short term and the long term using ‘DEA by Sequential Exclusion of Alternatives’ to assist improvement decisions. Finally, the research presents some methodological insights on the application of the ‘DEA by Sequential Exclusion of Alternatives’ approach by experimenting with changing parameters that have the potential to aid future applications.

References

  • Abankina, I. et al. (2016), “From equality to diversity: Classifying Russian universities in a performance oriented system”, Technological Forecasting and Social Change, 103, 228-239.
  • Aleskerov, F. & S. Petrushchenko (2013), “DEA by sequential exclusion of alternatives”, Higher School of Economics Working Paper Series, WP7/2013/02.
  • Aleskerov, F. & V. Petrushchenko (2015), “DEA for Heterogeneous Samples”, in: H.A. Le Thi & T.P. Dinh & N.T. Nguyen (eds.), Modelling, Computation and Optimization in Information Systems and Management Sciences, Springer, Cham, 15-21.
  • Atici, K.B. & V.V. Podinovski (2012), A Review of Data Envelopment Analysis studies in Agriculture, <http://fadntool.sggw.pl/Reviews/Downld?file=WP5_LR.pdf>, 28.01.2020.
  • Bogetoft, P. et al. (2007), “Reallocating sugar beet contracts: can sugar production survive in Denmark?”, European Review of Agricultural Economics, 34(1), 1-20.
  • Borgheipour, H. & F.H. Lotfi & Z. Moghaddas (2017), “Implementing energy efficiency for target setting in the sugar industry of Iran”, International Journal of Environmental Science and Technology, 14(8), 1697-1712.
  • Caves, D.W. & L.R. Christensen & W.E. Diewert (1982), “The economic theory of index numbers and the measurement of input, output, and productivity”, Econometrica: Journal of the Econometric Society, 1393-1414. Charnes, A. & W.W. Cooper & E. Rhodes (1978), “Measuring the efficiency of decision making units”, European Journal of Operational Research, 2(6), 429-444.
  • Cicek, O. & C. Şahin (2018), “Debating Cooperatives as an Alternative to Privatization of Sugar Mills in Turkey: The Case of Burdur Sugar Mill”, in: M.M. Erdoğdu & M.S. Zouboulakis & S.M. Akar & B. Turan-İçke (eds), Public Sector Economics & Development, London: IJOPEC Publication, 91-102.
  • Cinar, Y. (2013), “Research and Teaching Efficiencies of Turkish Universities with Heterogeneity Considerations: Application of Multi-Activity DEA and DEA by Sequential Exclusion of Alternatives Methods”, Higher School of Economics Working Paper Series, WP7/2013/04.
  • De Koeijer, T.J. et al. (2002), “Measuring agricultural sustainability in terms of efficiency: the case of Dutch sugar beet growers”, Journal of Environmental Management, 66(1), 9-18.
  • Demirtas, E.A. (2011), “A data envelopment-based clustering approach for public sugar factories in privatizing process”, Mathematical Problems in Engineering, 2011.
  • Duarte, A. et al. (2019). “Proposal of operating best practices that contribute to the technical efficiency in Brazilian sugar and ethanol mills”, Journal of Cleaner Production, 214, 173-184.
  • Emrouznejad, A. & B.R. Parker & G. Tavares (2008), “Evaluation of research in efficiency and productivity: A survey and analysis of the first 30 years of scholarly literature in DEA”, Socio-Economic Planning Sciences, 42(3), 151-157.
  • F.O. Licht’s (2019), “International highlights”, International Sugar and Sweetener Report. 151(16), 343.
  • Färe, R. et al. (1992), “Productivity changes in Swedish pharmacies 1980-1989: A non-parametric Malmquist approach”, Journal of Productivity Analysis, 3(1-2), 85-101.
  • Ferrantino, M.J. & G.D. Ferrier (1995), “The technical efficiency of vacuum-pan sugar industry of India: An application of a stochastic frontier production function using panel data”, European Journal of Operational Research, 80(3), 639-653.
  • Fogarasi, J. (2007), “Efficiency and total factor productivity in post-EU accession Hungarian sugar beet production”, Studies in Agricultural Economics, 105(1316-2016-102771), 87-100.
  • Goncharuk, A.G. (2009), “How to make sugar production more effective: A case of Ukraine”, Journal for East European Management Studies, 105-123.
  • Johnson, J.L. & H.O. Zapata & A.M. Heagler (1995), “Technical efficiency in Louisiana sugar cane processing”, Journal of Agribusiness, 13(345-2016-15422), 85-98.
  • Kumar, S. & N. Arora (2011), “Assessing technical efficiency of sugar industry in Uttar Pradesh: An application of data envelopment analysis”, Indian Economic Review, 323-353.
  • Mulwa, M.R. & A. Emrouznejad & F.M. Murithi (2009), “Impact of liberalization on efficiency and productivity of sugar industry in Kenya”, Journal of Economic Studies, 36(3), 250-264.
  • Murali, P. & D.P. Prathap (2017), “Technical efficiency of sugarcane farms: an econometric analysis”, Sugar Tech, 19(2), 109-116.
  • Murty, M.N. & S. Kumar & M. Paul (2006), “Environmental regulation, productive efficiency and cost of pollution abatement: a case study of the sugar industry in India”, Journal of Environmental Management, 79(1), 1-9.
  • Palcic, D. & E. Reeves (2015), “Privatization and the economic performance of Irish Sugar/Greencore”, Applied Economics, 47(55), 5945-5961.
  • Patlolla, S. & R.E. Goodhue & R.J. Sexton (2012), “Price floors and technical inefficiency in India’s sugar processing industry”, Agricultural Economics, 43(1), 105-114.
  • Raheman, A. et al. (2009), “Efficiency dynamics of sugar industry of Pakistan [with comments]”, The Pakistan Development Review, 921-938.
  • Seiford, L.M. & R.M. Thrall (1990), “Recent developments in DEA: the mathematical programming approach to frontier analysis”, Journal of Econometrics, 46(1-2), 7-38.
  • Ullah, A. et al. (2019), “Efficiency analysis of sugarcane production systems in Thailand using data envelopment analysis”, Journal of Cleaner Production, 238, 117877.
  • USDA Foreign Agriculture Service (2020), Turkey Sugar Annual Report 2019, <https://apps.fas.usda.gov/>, 24.01.2020.
  • Wu, S. & S. Devadoss & Y. Lu (2003), “Estimation and decomposition of technical efficiency for sugarbeet farms”, Applied Economics, 35(4), 471-484.
  • Ye, J. et al. (2016), “Evaluating sugarcane productivity in China over different periods using data envelopment analysis and the Malmquist index”, Sugar Tech, 18(5), 478-487.

Türk Şeker Üretiminin Özelleştirme Öncesi ve Sonrası Teknik Etkinliğinin Değerlendirilmesi

Year 2021, , 59 - 78, 25.01.2021
https://doi.org/10.17233/sosyoekonomi.2021.01.03

Abstract

2018 yılında Türk şeker sanayisi büyük ölçekli bir özelleştirmeyi tecrübe etmiştir. O yıl, 33 şeker fabrikasından 10 adeti özelleştirilmiştir. Bu araştırmanın amacı, bu özelleştirmelerin fabrikaların Teknik etkinliğine olan etkisini gözlemlemektir. Bu amaçla ülkenin çeşitli bölgelerinde yer alan 31 adet fabrikanın verisi kullanılmaktadır. Teknik etkinlik, Veri Zarflama Analizi (VZA), Malmquist Verimlilik Endeksi ile Alternatiflerin sıralı hariç tutulmasına dayalı VZA yöntemleri kullanılarak iki dönem için değerlendirilmektedir: özelleştirme öncesi (Eylül 2017 - Ağustos 2018) ve özelleştirme sonrası (Ağustos 2018 - Eylül 2019). Sonuçlar, öncelikle, analiz edilen dönemler arasında genel anlamda bir etkinlik düşüşüne işaret etmektedir. Bununla beraber, özelleşen fabrikalar etkinlikte artış gösteren tek alt küme olmaktadır. Araştırma, etkin olmayan fabrikalar için alternatiflerin sıralı hariç tutulmasına dayalı VZA kullanılarak elde edilen referans kümelerini de sunmaktadır. Çalışma ayrıca bu metodun gelecek uygulamalarına bir kavrayış sağlama amacına yönelik parametre değerlerinin değiştirilmesine dayanan testler de içermektedir.

References

  • Abankina, I. et al. (2016), “From equality to diversity: Classifying Russian universities in a performance oriented system”, Technological Forecasting and Social Change, 103, 228-239.
  • Aleskerov, F. & S. Petrushchenko (2013), “DEA by sequential exclusion of alternatives”, Higher School of Economics Working Paper Series, WP7/2013/02.
  • Aleskerov, F. & V. Petrushchenko (2015), “DEA for Heterogeneous Samples”, in: H.A. Le Thi & T.P. Dinh & N.T. Nguyen (eds.), Modelling, Computation and Optimization in Information Systems and Management Sciences, Springer, Cham, 15-21.
  • Atici, K.B. & V.V. Podinovski (2012), A Review of Data Envelopment Analysis studies in Agriculture, <http://fadntool.sggw.pl/Reviews/Downld?file=WP5_LR.pdf>, 28.01.2020.
  • Bogetoft, P. et al. (2007), “Reallocating sugar beet contracts: can sugar production survive in Denmark?”, European Review of Agricultural Economics, 34(1), 1-20.
  • Borgheipour, H. & F.H. Lotfi & Z. Moghaddas (2017), “Implementing energy efficiency for target setting in the sugar industry of Iran”, International Journal of Environmental Science and Technology, 14(8), 1697-1712.
  • Caves, D.W. & L.R. Christensen & W.E. Diewert (1982), “The economic theory of index numbers and the measurement of input, output, and productivity”, Econometrica: Journal of the Econometric Society, 1393-1414. Charnes, A. & W.W. Cooper & E. Rhodes (1978), “Measuring the efficiency of decision making units”, European Journal of Operational Research, 2(6), 429-444.
  • Cicek, O. & C. Şahin (2018), “Debating Cooperatives as an Alternative to Privatization of Sugar Mills in Turkey: The Case of Burdur Sugar Mill”, in: M.M. Erdoğdu & M.S. Zouboulakis & S.M. Akar & B. Turan-İçke (eds), Public Sector Economics & Development, London: IJOPEC Publication, 91-102.
  • Cinar, Y. (2013), “Research and Teaching Efficiencies of Turkish Universities with Heterogeneity Considerations: Application of Multi-Activity DEA and DEA by Sequential Exclusion of Alternatives Methods”, Higher School of Economics Working Paper Series, WP7/2013/04.
  • De Koeijer, T.J. et al. (2002), “Measuring agricultural sustainability in terms of efficiency: the case of Dutch sugar beet growers”, Journal of Environmental Management, 66(1), 9-18.
  • Demirtas, E.A. (2011), “A data envelopment-based clustering approach for public sugar factories in privatizing process”, Mathematical Problems in Engineering, 2011.
  • Duarte, A. et al. (2019). “Proposal of operating best practices that contribute to the technical efficiency in Brazilian sugar and ethanol mills”, Journal of Cleaner Production, 214, 173-184.
  • Emrouznejad, A. & B.R. Parker & G. Tavares (2008), “Evaluation of research in efficiency and productivity: A survey and analysis of the first 30 years of scholarly literature in DEA”, Socio-Economic Planning Sciences, 42(3), 151-157.
  • F.O. Licht’s (2019), “International highlights”, International Sugar and Sweetener Report. 151(16), 343.
  • Färe, R. et al. (1992), “Productivity changes in Swedish pharmacies 1980-1989: A non-parametric Malmquist approach”, Journal of Productivity Analysis, 3(1-2), 85-101.
  • Ferrantino, M.J. & G.D. Ferrier (1995), “The technical efficiency of vacuum-pan sugar industry of India: An application of a stochastic frontier production function using panel data”, European Journal of Operational Research, 80(3), 639-653.
  • Fogarasi, J. (2007), “Efficiency and total factor productivity in post-EU accession Hungarian sugar beet production”, Studies in Agricultural Economics, 105(1316-2016-102771), 87-100.
  • Goncharuk, A.G. (2009), “How to make sugar production more effective: A case of Ukraine”, Journal for East European Management Studies, 105-123.
  • Johnson, J.L. & H.O. Zapata & A.M. Heagler (1995), “Technical efficiency in Louisiana sugar cane processing”, Journal of Agribusiness, 13(345-2016-15422), 85-98.
  • Kumar, S. & N. Arora (2011), “Assessing technical efficiency of sugar industry in Uttar Pradesh: An application of data envelopment analysis”, Indian Economic Review, 323-353.
  • Mulwa, M.R. & A. Emrouznejad & F.M. Murithi (2009), “Impact of liberalization on efficiency and productivity of sugar industry in Kenya”, Journal of Economic Studies, 36(3), 250-264.
  • Murali, P. & D.P. Prathap (2017), “Technical efficiency of sugarcane farms: an econometric analysis”, Sugar Tech, 19(2), 109-116.
  • Murty, M.N. & S. Kumar & M. Paul (2006), “Environmental regulation, productive efficiency and cost of pollution abatement: a case study of the sugar industry in India”, Journal of Environmental Management, 79(1), 1-9.
  • Palcic, D. & E. Reeves (2015), “Privatization and the economic performance of Irish Sugar/Greencore”, Applied Economics, 47(55), 5945-5961.
  • Patlolla, S. & R.E. Goodhue & R.J. Sexton (2012), “Price floors and technical inefficiency in India’s sugar processing industry”, Agricultural Economics, 43(1), 105-114.
  • Raheman, A. et al. (2009), “Efficiency dynamics of sugar industry of Pakistan [with comments]”, The Pakistan Development Review, 921-938.
  • Seiford, L.M. & R.M. Thrall (1990), “Recent developments in DEA: the mathematical programming approach to frontier analysis”, Journal of Econometrics, 46(1-2), 7-38.
  • Ullah, A. et al. (2019), “Efficiency analysis of sugarcane production systems in Thailand using data envelopment analysis”, Journal of Cleaner Production, 238, 117877.
  • USDA Foreign Agriculture Service (2020), Turkey Sugar Annual Report 2019, <https://apps.fas.usda.gov/>, 24.01.2020.
  • Wu, S. & S. Devadoss & Y. Lu (2003), “Estimation and decomposition of technical efficiency for sugarbeet farms”, Applied Economics, 35(4), 471-484.
  • Ye, J. et al. (2016), “Evaluating sugarcane productivity in China over different periods using data envelopment analysis and the Malmquist index”, Sugar Tech, 18(5), 478-487.
There are 31 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Yetkin Çınar 0000-0002-4710-0346

Kazım Atıcı 0000-0003-0786-9641

Cem Menten 0000-0003-0259-3770

Publication Date January 25, 2021
Submission Date June 22, 2020
Published in Issue Year 2021

Cite

APA Çınar, Y., Atıcı, K., & Menten, C. (2021). Evaluating Technical Efficiency of Turkish Sugar Production in Pre and Post Privatization Periods. Sosyoekonomi, 29(47), 59-78. https://doi.org/10.17233/sosyoekonomi.2021.01.03
AMA Çınar Y, Atıcı K, Menten C. Evaluating Technical Efficiency of Turkish Sugar Production in Pre and Post Privatization Periods. Sosyoekonomi. January 2021;29(47):59-78. doi:10.17233/sosyoekonomi.2021.01.03
Chicago Çınar, Yetkin, Kazım Atıcı, and Cem Menten. “Evaluating Technical Efficiency of Turkish Sugar Production in Pre and Post Privatization Periods”. Sosyoekonomi 29, no. 47 (January 2021): 59-78. https://doi.org/10.17233/sosyoekonomi.2021.01.03.
EndNote Çınar Y, Atıcı K, Menten C (January 1, 2021) Evaluating Technical Efficiency of Turkish Sugar Production in Pre and Post Privatization Periods. Sosyoekonomi 29 47 59–78.
IEEE Y. Çınar, K. Atıcı, and C. Menten, “Evaluating Technical Efficiency of Turkish Sugar Production in Pre and Post Privatization Periods”, Sosyoekonomi, vol. 29, no. 47, pp. 59–78, 2021, doi: 10.17233/sosyoekonomi.2021.01.03.
ISNAD Çınar, Yetkin et al. “Evaluating Technical Efficiency of Turkish Sugar Production in Pre and Post Privatization Periods”. Sosyoekonomi 29/47 (January 2021), 59-78. https://doi.org/10.17233/sosyoekonomi.2021.01.03.
JAMA Çınar Y, Atıcı K, Menten C. Evaluating Technical Efficiency of Turkish Sugar Production in Pre and Post Privatization Periods. Sosyoekonomi. 2021;29:59–78.
MLA Çınar, Yetkin et al. “Evaluating Technical Efficiency of Turkish Sugar Production in Pre and Post Privatization Periods”. Sosyoekonomi, vol. 29, no. 47, 2021, pp. 59-78, doi:10.17233/sosyoekonomi.2021.01.03.
Vancouver Çınar Y, Atıcı K, Menten C. Evaluating Technical Efficiency of Turkish Sugar Production in Pre and Post Privatization Periods. Sosyoekonomi. 2021;29(47):59-78.