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Technical Efficiency in Agricultural Production and Its Determinants: An Exploratory Study at the District Level

Author

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  • K.R. Shanmugam

    () (Madras School of Economics)

  • Atheendar S. Venkataramani

    () (Yale University School of Public Health, New Haven, CT 06520 (USA))

Abstract

Given the importance of agriculture to the well being of a large percentage of India’s population, it becomes important to study how improvements can be made in the productivity of this sector. This study attempts to estimate the technical efficiency – a measure of how well inputs are being used towards producing output – of about 250 Indian districts in 1990-91. It employs the stochastic frontier function methodology. The results indicate that (i) the land elasticity is the highest followed by fertilizer; (ii) the mean efficiency of raising agricultural output is 79 per cent and therefore there is a scope for increasing output by 21 per cent without additional resources; (iii) states such as Madhya Pradesh, Uttar Pradesh, and Rajasthan have the largest number of districts with below average TE and they stand to gain the most from policy interventions towards improving technical efficiency. The results further indicate that health, education, and infrastructure are powerful drivers of efficiency at the district level and the relative importance of the determinants of efficiency across districts depends greatly on environmental factors, such as agro-climatic zones, technological factors, and crop mix. The results highlight the need for developing policy strategies at a more localized level.

Suggested Citation

  • K.R. Shanmugam & Atheendar S. Venkataramani, 2006. "Technical Efficiency in Agricultural Production and Its Determinants: An Exploratory Study at the District Level," Working Papers 2006-010, Madras School of Economics,Chennai,India.
  • Handle: RePEc:mad:wpaper:2006-010
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    References listed on IDEAS

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    Cited by:

    1. Lavanya Ravikanth Anneboina & K. S. Kavi Kumar, 2016. "Contribution of Mangroves to Marine Fisheries in India," Working Papers 2016-145, Madras School of Economics,Chennai,India.
    2. Kailash Chandra Pradhan & shrabani Mukherjee, "undated". "Technical Efficiency of Agricultural Production in India: Evidence from REDS Survey," Working Papers 2017-161, Madras School of Economics,Chennai,India.
    3. S. Majumder & B. K. Bala & Fatimah Mohamed Arshad & M. A. Haque & M. A. Hossain, 2016. "Food security through increasing technical efficiency and reducing postharvest losses of rice production systems in Bangladesh," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 8(2), pages 361-374, April.
    4. Bhatt, Mohammad Sultan & Bhat, Showkat Ahmad, 4. "Technical Efficiency and Farm Size Productivity ― Micro Level Evidence from Jammu & Kashmir," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 2(4).
    5. repec:eee:ecoser:v:24:y:2017:i:c:p:114-123 is not listed on IDEAS

    More about this item

    Keywords

    Agricultural Production;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D20 - Microeconomics - - Production and Organizations - - - General

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