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Technical Efficiency of Cold Storage in Bangladesh

M. Ayub Hossain
Farm Machinery and Postharvest Process engineering Division, Bangladesh Agricultural Research Institute, Gazipur-1701.

M. A. Monayem Miah
Agricultural Economics Division, Bangladesh Agricultural Research Institute, Gazipur-1701.

Abstract/ Executive Summary:

This paper presents the technical efficiency of cold storages in six selected potato growing districts of Bangladesh. Data were collected from 40 randomly selected cold storage managers from the study areas such as Comilla, Jessore, Munshigonj, Rajshahi, Bogra and Thakurgaon. Pre-tested interview schedule was used as data collecting tool. The average loss in cold storage during nine months storage period was 3.8% of total potato stored. Load shading, storing of unsorted potato, overload of storage bag are the main problems in cold storage operation. Cobb-Douglas Stochastic Frontier Production Function model was used for estimating technical efficiency of cold storage. The estimated mean technical efficiency of cold storages was 91%. Total nine independent variables were used in the model and out of them, five were found significant. The coefficients of daily maximum outside temperature, good bag used, electricity supply, relative humidity, maturity of stored potato was found significant at different levels. The increase of managers' experience and training and wooden floor would reduce the inefficiency of the model as well as increase the production of good potato. This model is recommended as a management tool for efficient management of cold storage in Bangladesh.

Keywords: Technical efficiency, Storage system, Cold storage, Potato

Location: Comilla, Jessore, Munshigonj, Rajshahi, Bogra and Thakurgaon

Start Date: 01-06-2009

End Date: 31-07-2009

Program Area: Postharvest and Agro-processing

Commodity: Potato

Objectives:

To measure technical efficiency of potato storage system in cold storage in Bangladesh.

Methodology:

A total of 40 cold storages were selected from six potato growing districts from different agro-ecological zones (AEZ) of Bangladesh. Primary data were collected from eight cold storages managers from each of the district of Munshigonj and Bogra and six from each of the district of Comilla, Jessore, Rajshahi and Thakurgaon by direct interview method using pre-tested interview schedule during June-July, 2009. Metrological data were received from the Metrological Stations from relevant districts or nearby districts. Stochastic frontier model has been developed to provide maximum likelihood estimates of a wide variety of stochastic frontier production and cost functions. The stochastic frontier production functions and notes the many special cases of these formulations which can be estimated. The stochastic frontier production function was independently proposed. The original specification involved a production function specified for cross-sectional data which had an error term which had two components, one to account for random effects and another to account for technical inefficiency. Cold storage output may be described by two ways. The first one is the quantity of good quality potato which is ultimately delivered by the cold storage authority to its client. The second one is the percentage of good quality potato received by the owner of potato. The second definition is used in this study because of policy concern. The ratio of observed stock and initial stock is multiplied by hundred will be the percent of good quality delivered potato. The quantity of quality potato is likely to be influenced by the availability of electricity in 24 hours, storage humidity in percent, outside maximum temperature in degree Celsius, duration of pre-cool period (hour), percent of good quality bags used, percent of mature potatoes stored, number of inversion, percent capacity utilization of cold storage, and storage period in month. These variables were chosen by stepwise regression analyses from more 15 variables using the software SPSS 11.0.

Source of Information: JOURNAL OF AGRICULTURAL ENGINEERING, IEB, VOL. 37/AE, Pp: 49-56, DECEMBER, 2009

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The average loss in cold storage during nine months storage period was 3.78% of total potato stored. Load shading, storing of unsorted potato, overload of storage bag are the main problems in cold storage operation. The estimated mean technical efficiency of cold storages was 91%. Total nine independent variables were used in the model and out of them, five were found significant. The coefficients of daily maximum outside temperature, good bag used, electricity supply, relative humidity, maturity of stored potato was found significant at different levels. The increase of mangers experience and training and wooden floor would reduce the inefficiency of the model as well as increase the production of good potato. This model is recommended for efficient management of cold storage in Bangladesh.

Knowledge Management: Journal