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Technical and Allocative Efficiency of Growing Wheat in Northwest Districts of Bangladesh

M. Elahi Bakh
Scientific Officer
Senior Scientific Officer (Agril. Econnomics), Wheat Research Centre, Dinajpur

M. Serajul Islam
Professor
Professor, Department of Agricultural Economics, Bangladesh Agricultural University, Mymensingh.

Abstract/ Executive Summary:

The present study was undertaken in the Northwest of Bangladesh to measure the technical and allocative efficiency of wheat production. Primary data from 200 farmers field were collected for this study. Frontier production model was used to estimate the technical efficiency and the marginal condition for profit maximization was used to estimate the allocative efficiency (AE). The mean farm specific technical efficiency of wheat growers were 88 percent and 69 percent at Dinajpur and Rangpur, respectively. The frontier farmers received higher yield by following optimum seeding time, using more urea, TSP, gypsum, manure and applying more frequently irrigation water with modest use of seed rate, and human labor at both the sites. So there is scope to increase the farmers' income and wheat yield by adopting the technologies adopted by the frontier farmers.

Keywords: Technical and allocative efficiency,Wheat, Northwest districts

Location: Dinajpur and Rangpur Birgonj and Sadar in Dinajpur and Kaunia and Pirgachha in Rangpur district

Start Date: 00-00-1999

End Date: 00-00-2000

Program Area: Socio-economic and Policy

Commodity: Wheat

Objectives:

To estimate the technical and allocative efficiencies as well as input use patterns of the most efficient farmers for wheat production

Methodology:

This study was conducted at Dinajpur and Rangpur districts covering 2 upazilas in each district; Birgonj and Sadar in Dinajpur and Kaunia and Pirgachha in Rangpur district. Two hundred wheat-farming households from eight villages (covering two villages from each upazila) were selected randomly. Data on all inputs used and output were collected from one selected wheat plot of each farmer during wheat season (1999-2000) by three visits. One visit was made just after completion of sowing, second was after completion of all intercultural operations and last one was after harvesting and threshing of wheat. The collected data were computerized, and analyzed through Microsoft Excel and SPSS programme. The stochastic frontier production function model was used to analyze data and interpretation of the results. The Stochastic Frontier Production Function Model The yield potential may be interpolated from yields of research managed plots (e.g. Herdt and Mandac 1981), or the most efficient farmers in a sample (e. g., Kalirajan and Flinn 1983). The latter approach was adopted for this study to find out yield potentials of wheat farmers. The production function maps the maximum possible output that can be produced for a given quantity of a set of inputs (Yotopoulos and Nugent 1976). Most farmers fail to operate on the production surface due to technical inefficiency (Farrel 1957). Following Lingard et al. (1983), the production technology of each farm was characterized by a Cobb- Douglas production function and estimated by using ordinary least squares (OLS) method. Experience has shown that it is desirable to use simple functions involving as few parameters as is practically feasible and perform best, since convergence problems in the estimation process can occur when there are a large number of independent variables in the estimated equation. The Cobb- Douglas functional form is a compromise between a complex production process and a complex estimation technique. The estimated equation was used to examine Timmer's measure of technical efficiency and Kopp's (1981) measure of allocative efficiency of inputs utilized in wheat. The Timmer's measure of technical efficiency of jth farms is the ratio of actual output to potential output, given the level of input use in jth farms. Thus, it indicates that how much extra output could be obtained if the jth farms are on the frontier.

Source of Information: Bangladesh J. Agric. Econs XXVIII, 1&2 (2005) 73-83

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The farm specific technical efficiency of wheat growers varied from 0.62 to 0.96 with a mean of 0.88 at Dinajpur followed by Rangpur farmers having mean 0.69 ranging 0.51 to 0.96. So it is possible to increase wheat production by 12% and 31% at Dinajpur and Rangpur, respectively by adopting the technologies used by the frontier farmers. The strategic agricultural extension activities should be extended to wheat crop enterprise basis. This will minimize the yield gap between the frontier and inefficient farmers and at the same time will increase total wheat production of the country.

Knowledge Management: Journal