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Farm-size-specific Technical Efficiency: a Stochastic Frontier Analysis for Rice Growers in Bangladesh

K. M. M. Rahman
Professor, Department of Agricultural Statistics, Bangladesh Agricultural University, Mymensingh.

M. I. Mia
Professor, Department of Agribusiness and Marketing, Bangladesh Agricultural University, Mymensingh.

M. A. Alam
Assistant Professor, Department of Agricultural Statistics, Bangladesh Agricultural University, Mymensingh.

Abstract/ Executive Summary:

The study was conducted during 2008-2009 to estimate the farm-size-specific technical efficiency of rice growers. The technical efficiency scores were estimated using stochastic production frontiers. The large farms received the highest yield (4772.83 kg) per hectare while marginal farms received the lowest yield (4610.53 kg). Gross return was found to be the highest for small farms and net return was the highest for marginal farms. The marginal farm experienced the highest benefit-cost ratio (BCR) followed by small, medium and large farm respectively. The average technical efficiency for large, medium, small, marginal and all farms were respectively 0.88, 0.92, 0.94, 0.75 and 0.88. There was significant technical inefficiency in the production of rice for marginal farms indicating that production could be increased by increasing efficiency with the existing technology for marginal farms. Farm management could help in increasing production in marginal farms. For other farms, increased managerial capacity was not enough for increasing production. New investment and advanced technology were needed to increase production in these farms. Farmers could increase 12 percent output with application of inputs and production technology at the aggregate level. The costs of fertiliser, manure, irrigation, insecticide and area and experience were important factors to increase production. Age, education and family size had negative impact on technical inefficiency whereas land had positive impact on technical inefficiency

Keywords: Farm size, Technical efficiency,Stochastic frontier analysis, Rice growers, Bangladesh

Location: 14 districts across Bangladesh

Start Date: 00-00-2008

End Date: 00-00-2009

Program Area: Socio-economic and Policy

Commodity: Rice

Objectives:

To estimate the farm-size-specific technical efficiency of rice growers

Methodology:

The data were collected from 1360 farmers interviewing them directly using a pretested questionnaire from 14 districts across Bangladesh. The districts were Dinajpur, Rangpur, Bogra, Rajshahi, Natore, Naogaon, Mymensingh, Sherpur, Kishoregonj, Sylhet, Camilla, Chittagong, Jessore and Barisal. The motivation of data collection was to accomplish a FAO funded research project. The selection of the districts was purposive considering them as major rice growing districts that contributed to about 16 percent of total rice production (BBS, 2008). But the selection of farmers of different categories was performed using stratified random sampling technique. The study was involved in four categories of farm households. These were marginal farm owning less than 50 decimals, small farm owning up to 249 decimals, medium farm up to 750 decimals and large farm owning above 750 decimals of land. Of the 1360 farm households, 138 households were selected from large, 416 households from medium, 440 households from small and 366 from marginal households. Some trained field enumerators collected the data during the crop year 2008 to 2009

Source of Information: Bangladesh J. Agric. Econs. XXXV, 1&2(2012) 131-142

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The large farms received the highest yield (4772.83 kg) per hectare while marginal farms received the lowest yield (4610.53 kg). Gross return was found to be the highest for small farms and net return was the highest for marginal farms. The marginal farm experienced the highest benefit-cost ratio (BCR) followed by small, medium and large farm respectively. The average technical efficiency for large, medium, small, marginal and all farms were respectively 0.88, 0.92, 0.94, 0.75 and 0.88. There was significant technical inefficiency in the production of rice for marginal farms indicating that production could be increased by increasing efficiency with the existing technology for marginal farms. Farm management could help in increasing production in marginal farms. For other farms, increased managerial capacity was not enough for increasing production. New investment and advanced technology were needed to increase production in these farms. Farmers could increase 12 percent output with application of inputs and production technology at the aggregate level. The costs of fertiliser, manure, irrigation, insecticide and area and experience were important factors to increase production. Age, education and family size had negative impact on technical inefficiency whereas land had positive impact on technical inefficiency

Knowledge Management: Journal