Environmental Efficiency of the Australian Irrigation Industry in Treating Salt Emissions

In this paper, a stochastic translog production function frontier is specified to estimate the input-oriented technical efficiency of 11 major Australian irrigation schemes. The analysis is applied to a panel data set including the years 1998/1999, 1999/2000 and 2000/2001. The environmental efficiency of each sampled irrigation scheme in relation to treating salt emissions is measured. These EE measures are based on estimates of technical efficiency. The potential reduction of the environmentally detrimental salt emissions resulting from the improvement of environmental inefficiency is estimated. The study indicates that the sampled schemes operated at an average of 80.4% (1998/1999), 89.9% (1999/2000) to 95% (2000/2001) of full environmental efficiency. The potential contraction of salt emission is substantial. The paper also reveals that there is a wide range of EE scores in each year suggesting differences in the management performance of the salt emission problem across individual schemes.