Analyzing the Efficiency of Libya’s Agricultural Sector for Growth and Sustainability: A DEA-Based Study to Identify Inefficiencies and Improvement Opportunities

Abstract

This study aims to analyze the efficiency of Libya’s agricultural sector using Data Envelopment Analysis (DEA) while identifying the factors influencing efficiency through the Tobit model. Time series data for the period 2002-2022 were analyzed to assess the performance of the agricultural sector in light of Libya’s economic and political transformations. The DEA results revealed significant variations in technical efficiency levels across different economic periods. The period of stability and relative growth (2002-2010) recorded the highest efficiency levels, driven by increased government spending and an improved agricultural investment environment. In contrast, the period of instability and turmoil (2011-2016) witnessed a sharp decline in efficiency due to the collapse of state institutions, reduced agricultural support, and weakened investments. Meanwhile, the period of partial recovery (2017-2022) showed slight improvements in efficiency but remained below the desired level, reflecting persistent challenges in resource allocation and weak agricultural policies.The results also highlighted the impact of fluctuations in agricultural investment, availability of natural resources, agricultural labor, and technology levels on production efficiency. Through the Tobit model, it was found that agricultural labor, agricultural investment, water availability, and corruption levels negatively affected efficiency, indicating structural challenges in resource allocation and inefficiencies in agricultural policies. Conversely, the level of agricultural technology was found to have no significant impact, emphasizing the need to enhance the utilization of modern technologies and promote agricultural innovation.

Based on these findings, the study recommends restructuring government support, improving agricultural resource management policies, combating corruption, fostering effective investments in agricultural technology, and developing training programs for agricultural labor. Implementing these recommendations would contribute to achieving agricultural sustainability, enhancing food security, and improving the efficiency of Libya’s agricultural sector in the face of economic and climatic challenges.