Management Efficiency and Economic Performance of Wheat Farms: A Digital Agriculture Perspective in Libya

Abstract

Food security remains a persistent challenge for Libya, a nation historically reliant on wheat imports to meet domestic demand. While the adoption of digital agriculture offers a transformative pathway to enhance agricultural productivity, its impact on the management efficiency and economic performance of local wheat farms remains underexplored. This study investigates the relationship between digital technology adoption and farm-level efficiency within the Libyan wheat sector. Utilizing a two-stage analytical framework, this research study first apply Data Envelopment Analysis (DEA) to measure the technical and allocative efficiency of 180 wheat farms across the Jeffara Plain and Al-Jabal al-Akhdar regions. Subsequently, a Tobit regression model is employed to isolate the effect of digital agriculture variables such as precision irrigation systems, drone-based crop monitoring, and farm management information systems (FMIS) on economic performance metrics, including yield per hectare and return on investment (ROI). The findings indicate that farms integrating at least two core digital technologies exhibit a 17.4% higher technical efficiency score compared to conventional counterparts. Furthermore, digital adoption significantly mitigates input waste, particularly in water and fertilizer usage, thereby improving net profit margins. However, infrastructural deficits and limited digital literacy among farm managers act as substantial moderating constraints. This research contributes to the digital economics literature by providing empirical evidence from a post-conflict, arid-region context, offering actionable policy recommendations for accelerating the digital transformation of Libya’s agricultural sector.