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Technical and Allocative Efficiency of Irrigated Sugarcane Farms in Northwest and Southwest Regions of Bangladesh

M.H. Kabir
Bangladesh Sugarcane Research Institute, Ishurdi, Pabna , Bangladesh.

M. M. Alam
Bangladesh Sugarcane Research Institute, Ishurdi, Pabna , Bangladesh.

Abstract/ Executive Summary:

The present study was conducted during 1997-98 to estimate the technical and allocative efficiency of irrigated sugarcane farms in Northwest and Southwest regions of Bangladesh. The study examines the possibility of raising sugarcane productivity by improving technical and allocative efficiency of farms in sugarcane production. A Cobb-Douglas production function was employed to estimate technical and allocative efficiency of sugarcane farms. Timmer's measure of technical efficiency and Kopp's measure of allocative efficiency were examined. The technical efficiency index computed showed a mean average technical efficiency of 0.61 implying substantial inefficiency exists among the sample sugarcane farmers under study. The allocative efficiency worked out to be 0.60. Results determine enough scope of increasing sugarcane output using the available inputs and technology.

Keywords: Frontier production function, Allocative efficiency, Technical efficiency.

Location: Khulna and Rajshahi division, Bangladesh

Start Date: 00-00-1997

End Date: 00-00-1998

Program Area: Knowledge Management

Non-commodity: Performance

Objectives:

To examine the Timmer's measure of technical efficiency and Kopp's measure of allocative efficiency in Northwest and Southwest regions of Bangladesh

Methodology:

Carew & Co. and Thakurgaon Sugar mills were selected from Khulna division of the region and Rajshahi HQ division of the region respectively for the study Northwest- Southwest. One sub-zone from each sugarcane mills zone, was selected for sampling. The samples included 12 villages of Chuadanga and 8 villages of Thakurgaon districts. Stratified random sampling was followed in selecting the sample farms. In total 117 samples were selected for collecting data under irrigated conditions. Data were collected by field investigators during 1997-98 cropping season. In the present study, frontier production function was derived from Cobb-Douglas production function estimated by Corrected Ordinary least Squares (COlS) method. The Timmer's measure of technical efficiency of farm i is the ratio of actual output to potential output, given the level of input use on farm i. It indicates how much extra output could be obtained if farm i were on the frontiers. Kopp's measure of allocative efficiency was derived for all resources. The Kopp's measure of allocative efficiency compares actual level of input use to the level which could be used if farm i was located on the frontiers, given the actual output of farm i and given the same ratio of input usage. In the present study, an attempt was made to examine the Timmer's measure of technical efficiency and Kopp's measure of allocative efficiency in Northwest and Southwest regions of Bangladesh.

Source of Information: Bangladesh Journal of Sugarcane, Vol: 23, pp: 74-81, July, 2001, ISSN 1991-8925

Article Link (Online Journal):

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

In conclusion, research findings indicate that there is a scope to increase technical efficiency of sugarcane farms substantially. The farm-specific technical efficiency and input-specific allocative efficiency exhibited scope for minimizing inefficiency in sugarcane production.

Knowledge Management: Journal