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Technical Efficiency of Rural Nepalese Farmers as Affected by Farm Family Education and Extension Services

  • Bhatta, Kiran Prasad
  • Ishida, Akira
  • Taniguchi, Kenji
  • Sharma, Raksha

An analysis of agricultural productivity revealed that capital, that is, inputs, other than land and labor, is an important production input that is also significant. Land also has a positive and significant contribution. Family labor is positive; however, hired labor is negative, though both are insignificant. Moreover, the technical inefficiency model revealed that agricultural extension services provided by non-governmental organizations have a positive and significant contribution, and it increases technical efficiency of the farm. Therefore we recommend policy that increases the role of non-governmental organizations in providing agricultural extension services. Similarly, the share of educated persons per household is also significantly and positively related to technical efficiency, so providing educational services to these households may also be helpful. However, in contrast to our expectation, government extension is found to have a negative effect on efficiency, though it is insignificant. As we can expect, because governmental organization takes the lion's share in terms of coverage, policies should be made favorable to improve their performance in providing agricultural extension services. An analysis of technical efficiency on farms revealed that on average they are operating well below the frontier, with the average technical efficiency being 69%; obviously there is ample room for improvement. With little changes in the production process, technical efficiency of the selected farms could be increased on average by up to 30%.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 40955.

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Date of creation: 01 Dec 2006
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Publication status: Published in Journal of Rural Economics Special Issue.2006(2006): pp. 316-323
Handle: RePEc:pra:mprapa:40955
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  1. Trudy Owens, 2001. "The impact of agricultural extension on farm production in resettlement areas of Zimbabwe," CSAE Working Paper Series 2001-06, Centre for the Study of African Economies, University of Oxford.
  2. Robert Evenson & Germano Mwabu, 2001. "The Effect of Agricultural Extension on Farm Yields in Kenya," African Development Review, African Development Bank, vol. 13(1), pages 1-23.
  3. Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July.
  4. Ali, Mubarik, 1996. "Quantifying the socio-economic determinants of sustainable crop production: an application to wheat cultivation in the Tarai of Nepal," Agricultural Economics, Blackwell, vol. 14(1), pages 45-60, April.
  5. Sharada Weir, 1999. "The effects of education on farmer productivity in rural Ethiopia," CSAE Working Paper Series 1999-07, Centre for the Study of African Economies, University of Oxford.
  6. Adams, Richard H, Jr, 1995. "Agricultural Income, Cash Crops, and Inequality in Rural Pakistan," Economic Development and Cultural Change, University of Chicago Press, vol. 43(3), pages 467-91, April.
  7. 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.
  8. Bravo-Ureta, Boris E. & Evenson, Robert E., 1994. "Efficiency in agricultural production: The case of peasant farmers in eastern Paraguay," Agricultural Economics, Blackwell, vol. 10(1), pages 27-37, January.
  9. Ali, Mubarik, 1996. "Quantifying the socio-economic determinants of sustainable crop production: an application to wheat cultivation in the Tarai of Nepal," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 14(1), April.
  10. Kalirajan, K P, 1990. "On Measuring Economic Efficiency," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 5(1), pages 75-85, January-M.
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