Received: 23 August 2018 Revised: 27 October 2019 Accepted: 12 December 2019 DOI: 10.1111/cjag.12220 ARTICLE Total factor productivity change in hog production and Quebec’s revenue insurance program Alphonse Singbo 1,2,3 Bruno Larue 1,3 Lota D. Tamini 1,3 1 Department of Agricultural Economics and Consumer Science, Centre d’Expertise en Gestion Agricole (CEGA), Laval University, Québec, Canada 2 Center for Research on the Economics of the Environment, Agri-Food, Transports and Energy (CREATE), Laval University, Québec, Canada 3 Centre for Research on the Economics of the Environment, Agri-food, Transports and Energy (CREATE) Correspondence Alphonse Singbo, Department of Agricultural Economics and Consumer Science, Laval Uni- versity, 2425 de l’Agriculture st., Local 4405 Paul-Comtois Bldg., Québec, QC G1V0A6, Canada. Email: alphonse.singbo@eac.ulaval.ca Abstract Quebec’s hog industry is supported by a revenue insurance program that guarantees a minimum price, but it also faces strict environmental constraints. Under price volatil- ity, risk-averse farms may contract their output enough to produce under increasing returns. We show that the subsidy and downside risk reduction effects of the revenue insurance program tend to stimulate output and increase the likelihood of produc- tion under increasing returns. Environmental constraints that raise the cost of manure management and limit areas under cultivation also increase the likelihood of decreas- ing returns. Scale efficiency and technical efficiency measures are obtained through a parametric decomposition of total factor productivity (TFP) obtained from the esti- mation of an output distance function. As in hog studies pertaining to other countries, we found a TFP average annual growth of 5.2% between 2004 and 2012. Scale effi- ciency is much lower than in other countries, as per our prior about the program’s distortions and environmental constraints. Integrating annual TFP gains into the set- ting of the minimum guaranteed price could reduce program costs by $12 million per year. About $70–80 million per year could be saved by investing in extension activities that would bring increase the level of technical efficiency of inefficient farms to the provincial average. A metatechnology frontier approach allowing for an endogenous input was also implemented to assess the robustness of the scale efficiency results. KEYWORDS hog farms, Quebec, scale efficiency, technical efficiency, total factor productivity L’industrie porcine québécoise est soutenue par un programme d’assurance revenu qui garantit un prix minimum, mais elle est également confrontée à de strictes contraintes environnementales. En raison de la volatilité des prix, les exploitations averses au risque peuvent réduire suffisamment leur production pour produire sous rendements croissants. Nous montrons que les effets de subvention et de la réduction des risques du programme d’assurance-revenu ont tendance à stimuler la production et à augmenter la probabilité de production avec des rendements croissants. Les contraintes environnementales qui augmentent le coût de la gestion du fumier et limitent les superficies cultivées aug- mentent également la probabilité de diminution des rendements. L’efficacité de taille et les mesures d’efficacité technique sont obtenues par une décomposition paramétrique de la productivité totale des facteurs (PTF) obtenue à partir de l’estimation d’une fonction de distance des extrants. Cand J Agr Econ. 2020;68:21–46. © 2020 Canadian Agricultural Economics Society 21 wileyonlinelibrary.com/journal/cjag