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Profit Efficiency Among Bangladeshi Rice Farmers

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Author Info
Rahman, Sanzidur

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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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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Umar Farooq & Trevor Young & Noel Russell & Muhammad Iqbal, 2001. "The supply response of basmati rice growers in Punjab, Pakistan: price and non-price determinants," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(2), pages 227-237. [Downloadable!]
  2. Kodde, David A & Palm, Franz C, 1986. "Wald Criteria for Jointly Testing Equality and Inequality Restriction s," Econometrica, Econometric Society, vol. 54(5), pages 1243-48, September. [Downloadable!] (restricted)
  3. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
  4. Baffes, John & Gautam, Madhur, 2001. "Assessing the sustainability of rice production growth in Bangladesh," Food Policy, Elsevier, vol. 26(5), pages 515-542, October. [Downloadable!] (restricted)
  5. Ahmed, Raisuddin & Hossain, Mahabub, 1990. "Developmental impact of rural infrastructure in Bangladesh:," Research reports 83, International Food Policy Research Institute (IFPRI). [Downloadable!]
  6. Kumbhakar, Subal C & Bhattacharyya, Arunava, 1992. "Price Distortions and Resource-Use Efficiency in Indian Agriculture: A Restricted Profit Function Approach," The Review of Economics and Statistics, MIT Press, vol. 74(2), pages 231-39, May. [Downloadable!] (restricted)
  7. Tim Coelli & Sanzidur Rahman & Colin Thirtle, 2002. "Technical, Allocative, Cost and Scale Efficiencies in Bangladesh Rice Cultivation: A Non-parametric Approach," Journal of Agricultural Economics, Blackwell Publishing, vol. 53(3), pages 607-626. [Downloadable!] (restricted)
  8. Bera, Anil K. & Kelley, Timothy G., 1990. "Adoption of high yielding rice varieties in Bangladesh : An econometric analysis," Journal of Development Economics, Elsevier, vol. 33(2), pages 263-285, October. [Downloadable!] (restricted)
  9. Ali, Farman & Parikh, Ashok & Shah, Mir Kalan, 1994. "Measurement of Profit Efficiency Using Behavioural and Stochastic Frontier Approaches," Applied Economics, Taylor and Francis Journals, vol. 26(2), pages 181-88, February.
  10. Kumbhakar, Subal C & Ghosh, Soumendra & McGuckin, J Thomas, 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 279-86, July.
  11. Tzouvelekas, Vangelis & Pantzios, Christos J. & Fotopoulos, Christos, 2001. "Technical efficiency of alternative farming systems: the case of Greek organic and conventional olive-growing farms," Food Policy, Elsevier, vol. 26(6), pages 549-569, December. [Downloadable!] (restricted)
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  1. 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. [Downloadable!]
  2. 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). [Downloadable!]
  3. 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. [Downloadable!]
    Other versions:
  4. Fitzpatrick, Trevor & McQuinn, Kieran, 2005. "Measuring Bank Profit Efficiency," Research Technical Papers 3/RT/05, Central Bank & Financial Services Authority of Ireland (CBFSAI). [Downloadable!]
    Other versions:
  5. Dasgupta, Susmita & Meisner, Craig & Wheeler, David, 2004. "Is environmentally-friendly agriculture less profitable for farmers ? evidence on integrated pest management in Bangladesh," Policy Research Working Paper Series 3417, The World Bank. [Downloadable!]
    Other versions:
  6. Udayanganie, A.D.D. & Prasada, D.V.P. & Kodithuwakku, K.A.S.S. & Weerahewa, J. & 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. [Downloadable!]
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