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Contract farmer and poultry farm efficiency in Bangladesh: a data envelopment analysis

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  • Ismat Ara Begum
  • Mohammad Jahangir Alam
  • Jeroen Buysse
  • Aymen Frija
  • Guido Van Huylenbroeck

Abstract

The objective of this article is to determine the efficiency of the poultry farm in Bangladesh and to assess the influence of contract farming system, using a data envelopment analysis. Seventy-five commercial poultry farms (25 and 50 independent and contract farms, respectively) were randomly selected. The results reveal that efficiency scores vary across sample farms. To explain some of these variations, the efficiency scores were regressed on some human capital variables and farming system using a Tobit model. The study also estimates elasticities to provide the information on the magnitude of the influence of variables on Technical Efficiency (TE), Allocative Efficiency (AE) and Economic Efficiency (EE). The results show that the contracting system is positively and significantly related to the farm's TE, AE and EE. This is expected because under contractual agreement, in order to obtain sufficient supplies of the right quality of poultry meat at the right time, the company provides technical know how assistance through company's recruited supervisor, production inputs and services, and production credit along with intensive supervision, which in turn improves farm efficiency. Thus, by receiving technical know how contract farmers have gained more knowledge on their resource and practices, which enables them to use resources more efficiently. Empirical results can provide crucial information to policy makers that improve poultry farm efficiency.

Suggested Citation

  • Ismat Ara Begum & Mohammad Jahangir Alam & Jeroen Buysse & Aymen Frija & Guido Van Huylenbroeck, 2012. "Contract farmer and poultry farm efficiency in Bangladesh: a data envelopment analysis," Applied Economics, Taylor & Francis Journals, vol. 44(28), pages 3737-3747, October.
  • Handle: RePEc:taf:applec:44:y:2012:i:28:p:3737-3747
    DOI: 10.1080/00036846.2011.581216
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    References listed on IDEAS

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    Cited by:

    1. Henningsen, Arne & Mpeta, Daniel F. & Adem, Anwar S. & Kuzilwa, Joseph A. & Czekaj, Tomasz G., 2015. "The Effects of Contract Farming on Efficiency and Productivity of Small-Scare Sunflower Farmers in Tanzania," 2015 Conference, August 9-14, 2015, Milan, Italy 212478, International Association of Agricultural Economists.
    2. Jiung-Bin Chin & Mu-Chen Wu & Ling-Feng Hsieh, 2013. "Strategic planning of optimal resource allocation in response to global financial crisis -- a study of international tourist hotels," Applied Economics, Taylor & Francis Journals, vol. 45(23), pages 3316-3328, August.
    3. Henningsen, Arne & Mpeta, Daniel F. & Adem, Anwar S. & Kuzilwa, Joseph A. & Czekaj, Tomasz G., 2015. "A Meta-Frontier Approach for Causal Inference in Productivity Analysis: The Effect of Contract Farming on Sunflower Productivity in Tanzania," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 206200, Agricultural and Applied Economics Association.
    4. Maertens, Miet & Vande Velde, Katrien, 2017. "Contract-farming in Staple Food Chains: The Case of Rice in Benin," World Development, Elsevier, vol. 95(C), pages 73-87.
    5. Anh Tru Nguyen & Janet Dzator & Andrew Nadolny, 2018. "Contract farming, agriculture productivity and poverty reduction: evidence from tea estates in Viet Nam," Asia-Pacific Sustainable Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 25(1), pages 109-145, June.

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