Technical Efficiency and Its Determinants in Rice Production: A Stochastic Frontier Approach to Aus, Aman, and Boro Seasons

Abstract

This study estimates the technical efficiency and its determinants among rice farmers in three seasons (Aus, Aman, and Boro) in Natore District in Bangladesh, employing the Cobb-Douglas SF approach using farm-level cross-sectional data. There were noticeable differences in the efficiency scores across the three seasons. Aman rice had the highest average efficiency score at 0.98, followed by Boro at 0.86 and Aus at 0.79. The closely clustered efficiency scores of Aman indicated that these farms were producing close to their feasibly optimal efficiency and, thus, the opportunity for improvement is limited. On the contrary, Aus and Boro appeared to have a wider gap between their average scores and optimal efficiency, implying they had significant room for improvement. On average, Aus farms could increase their output by 21% and Boro farms by 14% if they operated at the efficiency levels of the most efficient farmers. Of note is that Aman farmers had limited potential at 3% if they operated at the efficiency level of the most efficient Aman farmers. For those farmers experiencing the lowest efficiency potential, they could increase their output by 58% for Aus and 53% for Boro farms if they operated at the efficiency level of the most efficient farmers. Input elasticity indicated that among the rice farmers, the most important efficiency drivers across all seasons were land, fertilizer, pesticides, and irrigation. Labour was a significant factor only for Aus farmers. The inefficiency effects model also indicated that farm size and awareness of climate change contributed significantly to measuring technical efficiency. Although larger farms displayed greater efficiency levels, most noticeably for Aus farmers, this was not the case for Aman farmers. In contrast, age, education, and experience in farming had limited sensory effects in measuring the efficiency levels across the seasons. Findings suggest that environmental and structural factors more significantly contributed to measuring efficiency improvement than individual preferences and characteristics of the farmers. This finding further signifies the need for season-based, environmental, and structural tailored strategies to optimise the use of farm size, distribution of inputs, and availability of inputs to build capacity for the improved technical efficiency of farmers across the Aus, Aman, and Boro seasons.