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Socioeconomic Determinants of Modern Potato Varieties Adoption and Resource Use Efficiency in Northern Bangladesh

M. E. A. Begum
Senior Scientific Officer
Agricultural Economics Division, BARI, Joydebpur, Gazipur.

M. A. Monayem Miah
Senior Scientific Officer
Agricultural Economics Division, BARI, Joydebpur, Gazipur.

M. A. Rashid
Principal Scientific Officer
Agricultural Economics Division, BARI, Joydebpur, Gazipur.

Abstract/ Executive Summary:

This study evaluated the determinants of choosing modern potato variety and its’ productivity while allowing for production inefficiency at the level of individual producers. Results revealed that modern variety selection decisions are influenced positively by younger age and gross return from potato and negatively by a rise in the relative price of seed and wage of labour. Stochastic production frontier results revealed that land, labour and irrigation are the significant determinants of modern potato productivity. The mean level of technical efficiency (MTE) is estimated at 82% indicating that farmers can able to increase their yield about 3631 kg/ha which is equivalent to Tk 41250/ha. Policy implications include measures to increase land reform and keeping potato prices high to boost farm returns and offset the impact of a rise in the labour wage which will synergistically increase the adoption of modern potato as well as farm productivity.

Keywords: Socioeconomic, Adoption, Potato, Efficiency

Location: Bogra and Rangpur

Start Date: 00-00-2013

End Date: 00-00-2014

Program Area: Socio-economic and Policy

Non-commodity: Adoption of technology

Objectives:

1. To identify the determinants of choosing modern potato varieties;

2. To evaluate the determinants of modern potato varieties productivity, allowing for production inefficiency at the level of the individual farmer; and

3. To assess the comparative farm level production performance (technical efficiency scores) of individual producers.

Methodology:

Farm level data generated through household surveys was processed using integrated analytical framework. The study was compared the performance of modern and traditional varieties grown by the sample farmers. Thus, paired-t test was used to test the significance in the differences between modern and traditional varieties. Theoretical framework: Greene (2006; 2008) proposed an internally consistent method of incorporating ‘sample selection’ in a stochastic frontier framework which was adopted in this study and is elaborated as follows. Farmers are assumed to choose between modern and traditional potato varieties to maximize profits subject to a set of price and non-price factors. The decision of the i^th farmer to choose modern potato is described by an unobservable selection criterion function, , which is postulated to be a function of a vector of exogenous output prices, and factors representing farmers’ socio-economic circumstances. This study utilized cross-sectional primary data for the crop year 2015. The data were collected by a team of field researcher and Scientific Assistants via an intensive farm survey coordinated by the author. Multistage random sampling techniques were used in selecting study locations as well as the sample farmers. Two districts were initially selected (Bogra and Rangpur) because they have the highest area (57109 ha and 50401 ha respectively in 2013-2014) allocated to potato cultivation. Twelve and 11% of total potato production areas in Bangladesh are represented from these two districts respectively. Of these two districts, 2 upazilas were selected based on higher concentration of potato production. Major potato growing villages from 2 upazilas were selected with the consultation of the Department of Agricultural Extension (Agriculture Officer). One well structured and field pre-tested comprehensive interviewing schedule was used for the collection of detailed information on various aspects of the potato crop. Information was obtained on input and output quantities as well as prices, at the plot level. Additionally, socioeconomic characteristics of the farm families were also recorded. A total of 151 potato farmers taking 46 for traditional varieties and 105 for modern varieties were interviewed for this study. Two sets of variables are needed for this study- one for the probit variety selection model and the other for the stochastic production frontier model. The dependent variable in the probit equation is the farmers’ variety selection criterion. This is a binary variable that takes the value of 1 if a plot is planted with modern potato varieties and 0 otherwise. The explanatory variables include relative prices of variable inputs (P’i) of fertilizers, labour and seed normalised by the price of output (Py: potato). The other variables included in the probit equation are gross returns from potato production per ha, farmer’s age, education and farming experience. All the input and output variables used in the stochastic production frontier were measured on a per farm basis. The five input variables used in the model included land, labour, seed, fertilizers and irrigation, and all are expected to have a positive relationship with potato output.

Source of Information: Agricultural Economics Division, BARI, Report-2016, Joydebpur, Gazipur.

Article Link (Online Journal):

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

The study jointly evaluates the determinants of choosing to modern potato variety as well as the determinants of modern potato productivity, while allowing for production inefficiency at the level of individual producers, in Bangladesh by applying a sample selection framework in stochastic frontier models. The results confirm that both price and non-price factors determine the probability of choosing modern potato technology. Gross returns generated from production are the important determinants in choosing modern potato, although lower seed price and labour wage also matter in the selection decision as well. Therefore, the higher return of modern potato provides a good incentive to switch, which is further complemented by the availability of seed with lower prices. It also appears that modern potato farming is more attractive to younger producers. Results from the stochastic production frontier reveal that land and labour inputs are the main determinants of modern potato productivity. A high level of inefficiency still exists in modern potato production. The mean level of technical efficiency of these self-selected modern potato farmers is estimated at 82% , implying that there remains substantial scope to increase production by improving technical efficiency alone. The farm-specific variables used to explain inefficiencies indicate that those farmers who have better access to input markets, and those who do less off-farm work tend to be more efficient.

Knowledge Management: Report/Proceedings