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Profit Efficiency Among Bangladeshi Rice Farmers

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  • S Rahman
Abstract
Production inefficiency is usually analysed by its two components - technical efficiency and allocative efficiency. In this study we provide a direct measure of production efficiency of the Bangladeshi rice farmers using a stochastic profit frontier and inefficiency effects model. The data, which is for 1996, includes seven conventional inputs and several other background factors affecting production of modern or high yielding varieties (HYVs) of rice spread across 21 villages in three agro-ecological regions of Bangladesh. The results show that there are high levels of inefficiency in modern rice cultivation. The mean level of profit efficiency is 77% suggesting that an estimated 23% of the profit is lost due to a combination of both technical and allocative inefficiency in modern rice production. The efficiency differences are explained largely by infrastructure, soil fertility, experience, extension services, tenancy and share of non-agricultural income.
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  • S Rahman, 2002. "Profit Efficiency Among Bangladeshi Rice Farmers," Economics Discussion Paper Series 0203, Economics, The University of Manchester.
    • Handle: RePEc:man:sespap:0203
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    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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