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Single Vs. Multiple Input Adjustments and the Economic Efficiency of Farmers: an Application to Rural Bangladesh.

Najma R. Sharif
Department of Economics, Saint Mary's University Halifax, Nova Scotia, Canada

Abstract/ Executive Summary:

The aim of this paper is to illustrate the usefulness of single-input indices of the technical and allocative efficiency of farm households in rural Bangladesh, particularly when these are viewed in conjunction with the corresponding multiple-input indices. We focus on the question of whether single-input adjustments as opposed to (perhaps) more difficult multiple-input adjustments will be most effective (in terms of cost saving) in reducing or eliminating inefficiency. The application we consider is the efficiency of farmers in HYV rice cultivation which has spear-headed the "Green Revolution" in Bangladesh since the late '60s. In much of the empirical literature on efficiency, attention has primarily focused on the measurement of aggregate (i.e., multiple input) technical, allocative or profit efficiency. In contrast, studies on the inefficiency of individual inputs have been few, even though from a practical point of view, the inefficiency associated with individual inputs can be of particular relevance. Specifically, by revealing the pattern of inefficiency across inputs, single-input indices could help in determining the appropriate course of action in reducing or eliminating the costs of inefficiency, particularly when multiple-input adjustments are not feasible and/or the costs of adjustment vary by input.

Keywords: Single vs.multiple, Input adjustments,Economic efficiency,Farmers

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Start Date:

End Date:

Program Area: Socio-economic and Policy

Non-commodity: Social status

Objectives:

To illustrate the usefulness of single-input indices of the technical and allocative efficiency of farm households in rural Bangladesh

Methodology:

Data

Sample consists of input-output data for a sample of farmers taken from the Bangladeshi village of Khilghati in the cultivation of the dry-season rice crop.

Estimation

As is quite common in the estimation of production frontiers, a log-linear (i.e., Cobb-Douglas) stochastic frontier with technical efficiency has been adopted. Cultivated area, fertilizer, the services of bullocks, and the services of labour as the relevant inputs in the cultivation of HYV rice have been considered.

Source of Information: The Bangladesh Development Studies,Vol. 23, No. 3/4 (Sept.-Dec. 1995), pp. 111-128 Published by: Bangladesh Institute of Development Studies

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The aim of this paper was to show that single-input technical and allocative efficiency indices, in conjunction with the corresponding aggregative (multiple-input) indices can be useful in assessing the pattern of inefficiency of farmers, and in determining possible courses of action for reducing/ eliminating that inefficiency. To illustrate this, we examined survey data on a sample of farmers from the Bangladeshi village of Khilghati in the cultivation of a non-traditional, HYV rice crop. While HYV cultivation has spearheaded the "Green Revolution" in Bangladesh, and has undoubtedly helped farmers achieve impressive improvements in yields, the question of whether they were able to fully realize these potential gains well into the later stages of that revolution, is an additional issue upon which this paper attempts to shed some light. single-input adjustments (including those of fertilizer) would have only a marginal impact in dealing with the costs of overall economic inefficiency. This indicated a substantial overuse of the abundant labour input relative to other inputs, a problem that should be easier to deal with than the improper alignment of multiple inputs.

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