Technical, Allocative, Cost and Scale Efficiencies in Bangladesh Rice Cultivation: A Non‐parametric Approach

TLDR

Applying programming techniques to detailed data for 406 rice farms in 21 villages in 1997 yields inefficiency measures that differ substantially from simple yield and unit cost measures, highlighting the sub‑optimal use of costly survey data. The study aims to identify sources of inter‑farm performance differentials so that extension agents can assist inefficient farmers. Mean technical efficiency was 69.4 % in the Boro season (81.3 % allocative, 56.2 % cost, 94.9 % scale), with similar but slightly lower figures for the Aman season; allocative inefficiency stems from overuse of labour and fertiliser, large families are more inefficient, while better input market access and less off‑farm work improve efficiency.

Abstract

Applying programming techniques to detailed data for 406 rice farms in 21 villages, for 1997, produces inefficiency measures, which differ substantially from the results of simple yield and unit cost measures. For the Boro (dry) season, mean technical efficiency was 69.4 per cent, allocative efficiency was 81.3 per cent, cost efficiency was 56.2 per cent and scale efficiency 94.9 per cent. The Aman (wet) season results are similar, but a few points lower. Allocative inefficiency is due to overuse of labour, suggesting population pressure, and of fertiliser, where recommended rates may warrant revision. Second‐stage regressions show that large families are more inefficient, whereas farmers with better access to input markets, and those who do less off‐farm work, tend to be more efficient. The information on the sources of inter‐farm performance differentials could be used by the extension agents to help inefficient farmers. There is little excuse for such sub‐optimal use of survey data, which are often collected at substantial costs.