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Measuring Technical Efficiency of Onion (allium Cepa L.) Farms in Bangladesh

M. A. BAREE
Associate Professor
Department of Crop Science and Technology, University of Rajshahi, Bangladesh

Abstract/ Executive Summary:

An attempt was made to determine the overall farm-specific technical efficiency or inefficiency of onion farms of Bangladesh. Farm-level data were used for the estimation of the parameters of Cobb-Douglas stochastic frontier production function. The model for technical inefficiency effects in the stochastic frontier included age, experience, education, and farm size. The elasticity of output with respect to land, labour, and capital cost was estimated to be positive values of 0.3026, 0.0718, and 0.0442, respectively, and also significant. With respect to seed and irrigation, it was found to be insignificant with negative values of 0.0045 and 0.0007. It indicates that per hectare yield of onion decreases if the amount of seed and irrigation hour increase. The coefficients of age, experience, and farm size were significant with expected negative signs, which means that the inefficiency effects in onion production decreases with increase in age, experience, and farm size. The technical efficiency of onion farms varied from 58% to 99% with mean value of 83%. It denotes that there is a scope to increase output per hectare of onion farm by 17% through the efficient use of production technology without incurring any additional costs.

Keywords: Technical efficiency, Onion in Bangladesh

Location: Santhia Upazila of Pabna district

Start Date: 00-01-2004

End Date: 00-07-2004

Program Area: Socio-economic and Policy

Commodity: Onion

Objectives:

To find out the overall farm specific technical efficiency or inefficiency of onion farms.

Methodology:

The field survey was conducted covering the 15 villages of Santhia Upazila of Pabna district of Bangladesh during the period from January 2004 to July 2004. A total of 225 sample farmers were selected from all farm groups by using stratified random sampling technique. Face to face interviewing respondents' method was followed for data collection. The collected data ware scrutinized, edited, tabulated, and analyzed carefully to achieve the meaningful interpretation. The marginal analysis of variables was the basis of analysis for this study. The variables were measured functionally using stochastic frontiers production function. The parameters of respective variables were estimated using the statistical package FRONTIER 4.1 (Coelli, 1996). The Cobb-Douglas stochastic frontier production function model has been specified to estimate the level of overall technical efficiency of onion farms.

Source of Information: Bangladesh J. Agril. Res. 37(1): 171-178, March 2012, ISSN 0258-7122

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The study reveals that only 18.22 percent of total sample farmers were found to have received outputs which were very close to the maximum frontier outputs maintaining the efficiency level 90 percent to 100 percent and 38.22 percent of total sample farmers were observed to produce output lying on the efficiency level 80 percent to 90 percent, while 43.56 percent of total sample farmers produced outputs following the efficiency level 0 percent to 80 percent. The maximum and minimum technical efficiencies were observed to be 99 percent and 58 percent, respectively, where standard deviation was maintained at 11. The mean of technical efficiency was found to be 83 percent. From the result, it can be interpreted that on average, there appears to be 17 percent (= 1-0.83) technical inefficiencies among the sample farmers of onion farms. This implies that the output per hectare of onion farm can be increased, on average, by 17 percent through the efficient use of existing production technology without incurring any additional production costs.

Knowledge Management: Journal