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Determinants of Technical Efficiency of Freshwater Prawn Farming in Southwestern Bangladesh

Mst. Esmat Ara Begum
Agricultural Economics Division, Bangladesh Agricultural Research Institute, Joydebpur, Gazipur-1701, Bangladesh

Stefanos A. Nastis
Department of Agricultural Economics, School of Agriculture, Aristotle University of Thessaloniki, Greece

Evangelos Papanagiotou
Department of Agricultural Economics, School of Agriculture, Aristotle University of Thessaloniki, Greece

Abstract/ Executive Summary:

This paper estimates a translog stochastic production function to examine the determinants of technical efficiency of freshwater prawn farming in Bangladesh. Primary data has been collected using random sampling from 90 farmers of three villages in southwestern Bangladesh. Prawn farming displayed much variability in technical efficiency ranging from 9.50 to 99.94% with mean technical efficiency of 65 %, which suggested a substantial 35 % of potential output can be recovered by removing inefficiency. For a land-scarce country like Bangladesh this gain could help increase income and ensure better livelihood for the farmers. Based on the translog production function specification, farmers could be made scale efficient by providing more input to produce more output. The results suggest that farmers’ education and non-farm income significantly improve efficiency whilst farmers’ training, farm distance from the water canal and involvement in fish farm associations reduces efficiency. Hence, the study proposes strategies such as less involvement in farming-related associations and raising the effective training facilities of the farmers as beneficial adjustments for reducing inefficiency. Moreover, the key policy implication of the analysis is that investment in primary education would greatly improve technical efficiency.

Keywords: Bangladesh, Prawn farming, Technical efficiency, Translog stochastic frontier production function

Location: Fakirhat Upazila in Bagerhat district of southwest Bangladesh

Start Date:

End Date:

Program Area: Farming System

Commodity: Prawn, Freshwater, Farming System

Objectives:

To estimates a translog stochastic production function to examine the determinants of technical efficiency of freshwater prawn farming in Bangladesh.

Methodology:

Study area: The study was undertaken in the Fakirhat Upazila (lowest administrative unit) in Bagerhat district of southwest Bangladesh. Fakirhat was selected for this study as it is an important area for prawn culture because of the availability of natural- and hatchery-produced postlarvae, ponds and low-lying agricultural land. Culture season and methods: The peak season of prawn farming in the study area is from May to January. Prawn postlarvae are stocked in May to June and are harvested primarily from December to January, a culture period of around nine months. Between January and April, some of the farmers grow HYV Boro rice on the land inside the gher 2, which is irrigated by water from the inside canals using either traditional methods (swing basket) and/or pumps. Farmers use lime to reduce soil acidity at the time of gher preparation and during the culture period. Farmers use a wide range of homemade and commercially available supplementary feeds to increase prawn production including snail meat, rice bran, wheat bran, oil cake, and pulses. The system is costly and labour intensive. Farmers re-pair the gher dikes and trenches almost annually, before releasing prawn postlarvae. Analytical framework: The seminal paper of Farrell (1957) developed several approaches to efficiency and productivity analysis. Among these, the stochastic frontier production function and Data Envelopment Analysis (DEA) are the two principal methods for efficiency measurement. In developing countries’ agriculture where data are heavily influenced by measurement errors and the effects of weather conditions, diseases, etc, the stochastic frontier analysis has more advantages compared with data envelopment analysis (Färe et al., 1985; Kirkly et al., 1995, 1998; Jaforullah & Devlin, 1996; Coelli et al., 1998; Dey, 2000; Dey et al., 2005). This also applies to the applications of frontier techniques to prawn farming, hence a stochastic frontier production function is specified. The data: This study is based on farm-level cross-sectional data for the crop year 2011 collected from three villages (Faltita Baniyakhali, Saittala and Bailtali3) of Fakirhat Upazila. For the sampling method, a database of prawn farmers was collected from Upazila and the district Fisheries Offices. A total of 90 gher farmers were randomly selected. The survey was conducted for a period of 3 months from August to October 2011. Questionnaire interviews with gher farmers were preceded by preparation and testing of the questionnaire and the use of enumerators to fill in the questionnaire.

Source of Information: Journal of Agriculture and Rural Development in the Tropics and Subtropics, Vol. 117 No. 1 (2016) 99–112, ISSN: 2363-6033 (online); 1612-9830

Article Link (Online Journal): http://creativecommons.org/licenses/by/4.0

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

This study uses a translog stochastic frontier production function on survey data to determine the technical efficiency and its determinants in prawn farming in Bangladesh. The production frontier involves seven variables, including gher size, labour, fingerling, feed, lime, fertilizer and other cost. Similarly, the technical inefficiency model includes nine farm-specific variables, namely education, training, age, involvement to fish farm association, non-farm income, family size, distance, water quality and land lease. The level of technical efficiency of prawn farming is low at 65 % implying that a substantial 35 % of the potential output from the system can be recovered by eliminating inefficiency, given the existing technology and resource endowments. Our results confirmed that training, involvement in fish farm associations, family size, distance and water quality positively affected technical inefficiency whereas education, age, non-farm income and lease area negatively affected technical inefficiency. In particular, policies leading to improving water quality through lime application, construct the ponds close to the water channel or digging supplementary channels for reducing farm distance, proper involvement in farming-related associations which ensure the information flow and technology change, encourage the family members involvement in the off-farm activities, consider all farmers as participants of training programs (encourage small and medium farmers to participate in training programs) could be beneficial for reducing inefficiency in prawn farming in Bangladesh.

Knowledge Management: Journal