Technical Efficiency of Rice Production in India: A study using stochastic frontier analysis to estimate technical efficiency and its determinants
Goldman, Dana Rose
2013
- Submitted in partial fulfillment of the degree Master of Arts in Law and Diplomacy at the Fletcher School of Law and Diplomacy. This paper uses household survey data from the 2009 Kharif season in four states in India to estimate technical efficiency of rice production and analyze the determinants of technical efficiency. Technical efficiency scores and determinants of technical inefficiency were ... read morejointly estimated using a stochastic frontier analysis of production functions. The maximum likelihood approach in FRONTIER 4.1 was employed. On average, across the full sample (using a full-sample production frontier) farmers were operating with 52.89 percent efficiency. Farmers in Tamil Nadu were significantly more efficient than farmers in other areas (eastern Uttar Pradesh and Bihar/West Bengal). The number of years of formal education of the household head is positively and significantly correlated with technical inefficiency. Households with heads that are upper caste are significantly less efficient than households with non-upper caste heads. Households with concrete floors are significantly less efficient than that do not have them. Households that have a Below the Poverty Line card are significantly less efficient than those that do not have them. Households with access to piped water are significantly more efficient than those without access. The positive effects of formal education, caste and concrete floors on technical inefficiency are counter-intuitive results. Increased education, higher social status and increased household wealth would be expected to have a positive correlation with technical efficiency. A possible explanation may be that, better educated and higher caste households with more income own more land area and thus do not need to farm their land as intensively as households farming a smaller farm base. Alternatively, agriculture may not be the primary income generating activity for these households and thus they devote less time and managerial energy to agriculture. In order to increase technical efficiency in rice production, several policy goals have been identified. Because of the significant positive effect of fertilizer and pesticide use on output, increased fertilizer and pesticide use should be encouraged. In addition, due to the significant positive correlation between access to piped water and technical efficiency, increasing access to water infrastructure should be a priority. Given the high level of technical efficiency in Tamil Nadu, public investment in the state should be directed toward research and development for new technologies that will shift the production frontier outward. Lower degrees of technical efficiency in eastern Uttar Pradesh and Bihar/West Bengal mean that output growth can be achieved with current technology and thus public investment should be directed to measures that improve technical efficiency, such as training and infrastructure.read less
- ID:
- j9602b10f
- Component ID:
- tufts:UA015.012.081.00012
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