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Profit Efficiency Among Bangladeshi Rice Farmers

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  • Rahman, Sanzidur

Abstract

Production inefficiency is usually analysed by its two components - technical efficiency and allocative efficiency. In this study we provide a direct measure of production efficiency of the Bangladeshi rice farmers using a stochastic profit frontier and inefficiency effects model. The data, which is for 1996, includes seven conventional inputs and several other background factors affecting production of modern or high yielding varieties (HYVs) of rice spread across 21 villages in three agro-ecological regions of Bangladesh. The results show that there are high levels of inefficiency in modern rice cultivation. The mean level of profit efficiency is 77% suggesting that an estimated 23% of the profit is lost due to a combination of both technical and allocative inefficiency in modern rice production. The efficiency differences are explained largely by infrastructure, soil fertility, experience, extension services, tenancy and share of non-agricultural income.

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Paper provided by International Association of Agricultural Economists in its series 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa with number 25898.

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Date of creation: 2003
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Handle: RePEc:ags:iaae03:25898

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Keywords: Stochastic profit frontier; profit efficiency; Bangladesh; Crop Production/Industries; Productivity Analysis; O33; Q18; and C21.;

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Cited by:
  1. Susmita Dasgupta & Craig Meisner & David Wheeler, 2007. "Is Environmentally Friendly Agriculture Less Profitable for Farmers? Evidence on Integrated Pest Management in Bangladesh," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(1), pages 103-118.
  2. Wollni, Meike & Brümmer, Bernhard, 2012. "Productive efficiency of specialty and conventional coffee farmers in Costa Rica: Accounting for technological heterogeneity and self-selection," Food Policy, Elsevier, vol. 37(1), pages 67-76.
  3. Nwachukwu, Ifeanyi N. & Onyenweaku, Chris E., 2009. "Allocative Efficiency among Fadama Fluted Pumkin Farmers in Imo State, Nigeria," MPRA Paper 27249, University Library of Munich, Germany.
  4. Minten, Bart & Murshid, K.A.S. & Reardon, Thomas, 2013. "Food Quality Changes and Implications: Evidence from the Rice Value Chain of Bangladesh," World Development, Elsevier, vol. 42(C), pages 100-113.
  5. Rahman, Sanzidur, 2008. "Whether crop diversification is a desired strategy for agricultural growth in Bangladesh," 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK 36867, Agricultural Economics Society.
  6. Fitzpatrick, Trevor & McQuinn, Kieran, 2005. "Measuring Bank Profit Efficiency," Research Technical Papers 3/RT/05, Central Bank of Ireland.
  7. Paula Carvalho Pereda & Denisard Alves, 2014. "Agriculture And Climate: Short Andlong-Term Implications From Brazilian Municipalities," Anais do XL Encontro Nacional de Economia [Proceedings of the 40th Brazilian Economics Meeting] 199, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  8. Asadullah, M. Niaz & Rahman, Sanzidur, 2006. "Farm Productivity and Efficiency in Rural Bangladesh: The Role of Education Revisited," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25482, International Association of Agricultural Economists.
  9. Anik, Asif Reza & Breustedt, Gunnar & Bauer, Siegfried, 2011. "The Impact of Corruption on Farmers' Efficiency in Rice Production: A Natural Experiment from Bangladesh," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114224, European Association of Agricultural Economists.
  10. Nmadu, Job N. & Simpa, James O., 2014. "Rethinking The Technical Efficiency Of Small Scale Yam Farmers In Nigeria Using Conventional And Non-Conventional Inefficiency Parameters," 2014 Conference (58th), February 4-7, 2014, Port Maquarie, Australia 165866, Australian Agricultural and Resource Economics Society.
  11. Santos, Jozimo & Foster, William E. & Ortega, Jorge & Ramirez, E., 2006. "Estudio de la Eficiencia Técnica de Productores de Papas en Chile: El Rol del Programa de Transferencia Tecnológica de INDAP," Economia Agraria, Agrarian Economist Association (AEA), Chile, vol. 10.
  12. Rahman, Sanzidur, 2004. "Regional Productivity Differences And Prospect For Convergence In Bangladesh Agriculture, 1964-1992," 2004 Annual meeting, August 1-4, Denver, CO 20047, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  13. Minten, Bart & Murshid, K.A.S. & Reardon, Thomas, 2011. "The quiet revolution in agrifood value chains in Asia: The case of increasing quality in rice markets in Bangladesh," IFPRI discussion papers 1141, International Food Policy Research Institute (IFPRI).
  14. Amarender Reddy, A. & Bantilan, Ma Cynthia S., 2012. "Competitiveness and technical efficiency: Determinants in the groundnut oil sector of India," Food Policy, Elsevier, vol. 37(3), pages 255-263.
  15. Chand, Narendra & Kerr, Geoffrey N. & Bigsby, Hugh R., . "Why some community forests are performing better than others: a case of forest user groups in Nepal," 2010 Conference, August 26-27, 2010, Nelson, New Zealand 96827, New Zealand Agricultural and Resource Economics Society.
  16. Udayanganie, A.D.D. & Prasada, Dickwella Vidanage Pahan & Kodithuwakku, K.A.S.S. & Weerahewa, Jeevika & Little, D.C., 2006. "Efficiency Of The Agrochemical Input Usage In The Paddy Farming Systems In The Dry Zone Of Sri Lanka," Annual Meeting, May 25-28, 2006, Montreal, Quebec 34181, Canadian Agricultural Economics Society.
  17. Binam, Joachim Nyemeck & Tonye, Jean & wandji, Njankoua & Nyambi, Gwendoline & Akoa, Mireille, 2004. "Factors affecting the technical efficiency among smallholder farmers in the slash and burn agriculture zone of Cameroon," Food Policy, Elsevier, vol. 29(5), pages 531-545, October.
  18. Meike Wollni & Bernhard Brümmer, 2009. "Productive efficiency of specialty and conventional coffee farmers in Costa Rica: Accounting for technological heterogeneity and self-selection," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 13, Courant Research Centre PEG.

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