A DEA-based evaluation of upstream food supply chain efficiency: evidence from Australian banana farms

Purpose This study aims to evaluate the efficiency levels of Australian banana farms and identify strategies for improvement. The findings address critical challenges in the horticulture industry by promoting more efficient resource utilisation during the growing phase, thereby reducing waste and enhancing overall supply chain sustainability. Design/methodology/approach Data from 27 banana farms across Queensland, New South Wales and South Australia were analysed using both traditional and entropy-based data envelopment analysis (DEA). A variable returns to scale (VRS) model with an input orientation was applied, incorporating one output (cartons packed) and four inputs (employee wages, fertiliser usage, packaging costs and on-costs). Findings The study’s findings using entropy-based DEA reveal that among 27 farms analysed, 37% achieve technical efficiency scores exceeding 90%, with 26% identified as fully efficient relative to their counterparts. Two farms emerge as key benchmarks for others. However, only 22% of farms exhibit scale efficiency scores above 90%. Most farms, except the two fully efficient ones, operate under increasing returns to scale, highlighting potential benefits from farm size expansion. On average, achieving full technical efficiency could result in cost savings of 26.9% on employee wages, 34.7% on fertilizer use, 21.7% on packaging costs and 33.1% on on-costs. The entropy-based DEA produces results comparable to the traditional DEA but offers greater discriminative power, making it a more effective decision-making tool. Research limitations/implications Through efficiency comparison of farms, this study advances the understanding of horticultural waste reduction by improving farm practices related to labour deployment, fertiliser use, packaging and other resources. Using Australian banana farms as a case study, it demonstrates that enhanced farm management and more efficient input usage can minimise production costs while maintaining target output levels, thereby promoting long-term sustainability. Limited sample size and unmapped farm locations are the key limitations of this study. Practical implications The findings provide insights for government and trade associations to formulate strategies and develop sector action plans for improving efficiency hence sustainability of the entire industry through knowledge sharing and inter-farm collaboration. These improvement measures can also be applied across other sectors of the food supply chain to help reduce food loss and waste at the farm level. Social implications This research identifies benchmarks to help banana farmers enhance farming practices and management skills. By reducing crop loss and waste, it fosters sustainability, mitigates food loss and promotes circularity in the banana supply chain. The findings empower farmers to adopt efficient, environmentally friendly practices for long-term impact. Reducing losses at the farm level can significantly strengthen the global food supply and contribute to alleviating chronic hunger in vulnerable regions. Originality/value This study extends the use of traditional and entropy-based DEA to comparing the efficiency of banana farms to help identify areas for improvement in terms of resource usage and farm management. Availability of a relatively simple and easy-to-understand efficiency comparison tool can help the industry identify benchmarks for knowledge sharing to benefits farming communities.