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Impact of Farm-specific Factors on the Technical Inefficiency of Producing Rice in Bangaldesh

Khandaker Md. Mostafizur Rahman
Ph. D. student
Ph. D. student of the Institute of Agricultural Policy and Marketing Research, Justus-LiebigUniversity Giessen, Germany

Peter Michael Schmitz
Professor
Professor of Agricultural Policy and Marketing Research and Dean of the Faculty of Agriculture, Justus-Liebig-University Giessen,Germany.

Tobias C. Wronka
Ph. D. student
Ph. D. student of the Institute of Agricultural Policy

Abstract/ Executive Summary:

The rice production of Bangladesh has been investigated using a Cobb-Douglas stochastic production function which incorporates a model for the technical inefficiency effects. Farm level primary data collected by stratified random sampling technique are used for this study. The factors identified in the stochastic production frontiers which are responsible for the increase of production are extension service, farm size, bullock power, age and experience. Seed, fertilizer, human labour and irrigation cost were identified as important factors for the increase of production for only Boro rice and were not important factors for Aus and Aman rice crops. The models for the technical inefficiency effects in the Cobb-Douglas stochastic production frontiers include the farm-specific factors age, education, experience, extension contact and farm size. The factors which influence the technical inefficiency effects are identified by simultaneous estimations of stochastic production frontiers and technical inefficiency effect models for different rice crops. The study reveals that the impacts of age,, experience, extension contact and farm size on the technical inefficiency effects are significantly negative which means that technical inefficiency effects decrease significantly with the increase in the magnitudes of these factors. The study also indicates that there are significant technical inefficiency effects in the production of all rice crops and the random component of the inefficiency effects explains that a significant portion of the difference between the observed output and the maximum production frontier output is caused by differences in farmers' levels of technical efficiency.

Keywords: Impact,Farm,Technical inefficiency,Rice production

Location: Brahmanbaria, Mymensingh and Dinajpur

Start Date: 00-07-1998

End Date: 00-06-1999

Program Area: Socio-economic and Policy

Commodity: Rice

Objectives:

TO INVESTIGATE THE IMPACT OF FARM-SPECIFIC FACTORS ON THE TECHNICAL INEFFICIENCY OF PRODUCING RICE IN BANGLADESH

Methodology:

Data: The three regions, that is, Brahmanbaria, Mymensingh and Dinajpur were selected purposively considering the relative importance of these regions inproducing rice. These three great regions (old district) produce about 16 percent of total rice in Bangladesh (BBS 1998). Considering their contribution to the total output, the selection of these regions was appropriate for a study on the efficiency of rice production. Moreover, soil texture of these regions represents the soil texture of the country. Farmers of these regions are familiar with new inputs of production such as HYV seeds, artificial irrigation, chemical fertilizer etc. for several years and in these regions there are the requisite number of households with different farm sizes. The regions are also relatively easily accessible and well communicated. Since Dinajpur is the north-west district of the country, Mymensingh is the middle district and Brahmanbaria is the south-east district, the selection of these areas was uniform on the spatial context. To collect the primary data from the farmers of Bangladesh probability sampling technique was adopted. At first a sampling frame of farmers was constructed with the help of village leaders and some other relevant persons. The villages were selected with simple random sampling technique but the farmers were selected with stratified random sampling with arbitrary allocation. The data were collected for the crop year July 1998 to June 1999. The sample composed of small (below 1.00 hectare), medium (1.00-3.00 hectare) and large (above 3.00 hectares) farms. Within sample, 50 percent are small, 30 percent are medium and 20 percent are large farmers. Five hundred farmers in total were interviewed in this study. Of the five hundred samples, 300 farmers had direct contact with extension workers and were selected 100 from each region to have an idea on importance of extension service in Bangladesh. Another 200 farmers, those who had no relation with the extension workers were selected 100 from each region except Mymensingh region. For the region Mymensingh only a sample of 100 farmers with extension service was collected but no sample of non-extension farmers was collected because there is one agricultural university known as Bangladesh Agricultural University and from this university every year several extension programmes are carried out in this region side by side government extension programmes. Thus farmers of this region are more or less related with extension programmes. To have a comparison of the productivities between farmers with extension services and farmers without extension services, these two types of data are very much useful.

Source of Information: Bangladesh J. Agric. Eons. XXII, 2 (1999): 19-41

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The study revealed that the impacts of age,, experience, extension contact and farm size on the technical inefficiency effects were significantly negative which means that technical inefficiency effects decrease significantly with the increase in the magnitudes of these factors. The study also indicated that there were significant technical inefficiency effects in the production of all rice crops and the random component of the inefficiency effects explains that a significant portion of the difference between the observed output and the maximum production frontier output is caused by differences in farmers' levels of technical efficiency.

Knowledge Management: Journal