Groundwater overuse and farm-level technical inefficiency: evidence from Sri Lanka
AbstractExtraction of groundwater for onion and other cash crop production has been increasing rapidly during the last two decades in the dry zone areas of Sri Lanka. As a result of overuse, the quantity of available groundwater is gradually declining, while water quality is deteriorating. The deteriorating water quality has a negative impact on agricultural production, especially for crops (such as onions) that are sensitive to increases in salinity levels. This issue is examined with respect to onion production in Sri Lanka. A stochastic frontier production function (SFPF) is used, in which technical efficiency and the determinants of inefficiencies are estimated simultaneously. The results show that farmers are overusing groundwater in their onion cultivation which has resulted in decreasing yields. Factors contributing to inefficiency in production are also identified. The results have important policy implications.
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Bibliographic InfoPaper provided by School of Economics and Finance, Queensland University of Technology in its series School of Economics and Finance Discussion Papers and Working Papers Series with number 279.
Length: 45 pages
Date of creation: 14 Mar 2012
Date of revision:
Agriculture; groundwater recharge; salinization; Sri Lanka;
This paper has been announced in the following NEP Reports:
- NEP-AGR-2012-03-21 (Agricultural Economics)
- NEP-ALL-2012-03-21 (All new papers)
- NEP-EFF-2012-03-21 (Efficiency & Productivity)
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