The Technical Efficiency of Transplanted Aman Rice Farms in Bangladesh

Abstract

The comparison of technical efficiency scores has been estimated by the parametric and nonparametric production model for agricultural rice farms. This paper used a trans-log stochastic frontier model to explain the existing sources of inefficiency of rice farm due to socioeconomic and farm-specific variables in seven selected regions of Bangladesh based on agro-economic zone. The motivational point is to “start trade” in international rice market like other Asian countries. The results show that the estimated technical efficiency of Transplanted AMAN rice farms are vary from 45% to 92% in case of stochastic frontier analysis (SFA). In addition, the estimated technical efficiency is varying from 64% to 79% in case of data envelopment analysis (DEA). The farms’ distributed technical efficiency scores were found higher in the method of parametric SFA than nonparametric DEA in the regions of Dhaka, Khulna, Barisal and Rangpur. The graphical representation of the kernel density estimate indicates that inefficiency was among the farms in the all the selected regions. The results of kernel density estimate indicate that efficiency were negatively skewed in Dhaka, Rajshahi, Khulna, Barisal, Sylhet and Rangpur region. We can conclude that in some places, it can be possible to improve rice production using farmers existing input level. However, there is lot to subsidize for farmers which can be contributed by the local government. They should provide necessary supports for production for marginal farm owners such as training, credit, improved seed and fertilizers and also market facility.