The present paper is a humble attempt to test the allocative efficiency of the farmers in a traditional Orissan agriculture system in terms of resource-use and crop selection. While examining their allocative efficiency it is noted that the rational farmers are not necessarily efficient farmers. The farmers in the sample area are found to be rational in taking production decisions and efficient in the selection of crops and allocation of land in obtaining maximum possible outputs with the given resource constraints. However, they have been misutilizing their surplus non-hired labour and operating at the low level of efficiency due to some hurdles such as inadequate working capital, irrigation water and lack of embankments on the rivers. If these hurdles are removed, they would be able to perform at their highest level of efficiency.
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