Abstract:
Efficiency in agricultural production is indicative of the efficiency level of farm
households in their farming activities. Farmers in developing countries do not make use of
all the potential technological resources, thus making inefficient decisions in their
agricultural activities. Herein, technical efficiency in relation with the production of three
types of rice crop (Boro, Aus and Aman) was evaluated, with some determinants of
technical efficiency identified, in Bangladesh. It was attempted, throughout this study, to
access the status of technical efficiency in rice production in Bangladesh for panel data
while using the Stochastic Frontier Production Model with either of truncated normal or
half-normal distributional assumptions. Both time-variant and time-invariant inefficiency
effects models were estimated, one at a time. Collected data from agricultural sector
pertaining to three main rice crops in Bangladesh for the period of 1980 to 2008 were
made used of throughout the study. The results revealed that technical efficiency
gradually increased over the reference period with the half normal distribution being
found preferable to the truncated normal distribution as regards the technical inefficiency
effects. The value of technical efficiency was found high for Boro rice while low for Aus in
comparison with Aman rice in Bangladesh for both distributions in either of time-variant
or invariant ones. It was observed that the most efficient rice production system has
occurred for the case of Boro with a technical efficiency of 0.98. Yearwise mean technical
efficiency increased during the reference time periods.
Keywords: Bangladesh rice production, Cobb-Douglas stochastic frontier model, Panel data,
Time variant and Time invariant efficiencies.
