In this study a non–parametric method of data envelopment analysis (DEA) was applied to analyze the cost efficiency of farmers in order to optimize the input costs for alfalfa production in Hamedan province of Iran. Data were collected using face–to–face questionnaire from 80 farms in central region of Hamedan province which is the most important center of alfalfa production in Iran. The DEA method was done based on eight input costs including human labour, land rent, seed, water for irrigation, fertilizers, farmyard manure, biocide and machinery with the single output of alfalfa yield. The technical, pure technical and scale efficiencies of farmers were calculated as 0.906, 0.962 and 0.940, respectively. Total optimum cost requirement was found to be about 11257 $ ha –1; showing that 20.57% of input costs could be saved if the farmers follow the results recommended by this study. Moreover the contribution of water for irrigation input from total cost saving was 83.48% which was the highest share, followed by machinery and chemical fertilizers input costs. Optimization of input costs, improved the benefit/cost ratio, productivity and net return by 25.45%, 25.84% and 77.50%, respectively.
Data envelopment analysis, Optimization, Technical efficiency, Cost saving, Alfalfa
