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Analysis of Technical Efficiency of Sugarcane Crop in Khyber Pakhtunkhwa: A Stochastic Frontier Approach

Analysis of Technical Efficiency of Sugarcane Crop in Khyber Pakhtunkhwa: A Stochastic Frontier Approach

Amjad Ali and Abbas Ullah Jan

Department of Agricultural and Applied Economics, The University of Agriculture, Peshawar, Khyber Pakhtunkhwa, Pakistan.

amjad_ali@aup.edu.pk

ABSTRACT

Current research, based on cross sectional data, was carried out in three districts of Khyber Pakhtunkhwa, i.e district Mardan, Charsadda and Dera Ismail Khan. Randomly a sample size of 303 sugarcane growers was formally interviewed for crop season 2014-15 through a pretested questioners prepared on the bases of objectives of the study. Stochastic Frontier Approach (SFA) was employed for data analysis using computer software STATA. Result illustrates that technical efficiency of sugarcane crop for the period under study in Khyber Pakhtunkhwa ranges from minimum 0.47 to maximum 0.98 with mean value of 0.84 percent. This mean that with same resource base average sugarcane growers can increase his yield up to 14% and most technical inefficient grower can increase his per acre yield up to 52% in order to achieve technical efficiency level (98%) of efficient fellow grower in study area. Maximum Likelihood Estimate (MLE) of technical efficiency describes that in study area one percent increase in land under sugarcane crop, seed , urea, DAP, farmyard manure, tractor hours, irrigation, pesticides used and labour days would rise sugarcane yield by 0.053, 0.103, 0.068, 0.020, 0.024, 0.111, 0.118, 0.005 and 0.121% respectively. All inputs except DAP, farmyard manure and pesticides were found significant at 5% significance level. In inefficiency model grower age, experience and contact with extension workers has significant contribution in decreasing farm inefficiency. However, grower’s family size, his off-farm income and distance between farm and house were found non-significant. The coefficient of education reveals that in study area inefficiency raised with increase in grower’s formal education. In order to increase grower’s productivity government should ensure the provision of quality extension services. Many of the farmers achieving high and consistent yield and then obtaining high technical efficiency in study area can be used effectively to demonstrate the benefits of good farming practices for reduction of gap between the most technical efficient and the inefficient farmers. Empirical results illustrate that there exist opportunity to increase yield at present level of inputs use and technology.

 

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Sarhad Journal of Agriculture

September

Vol. 35, Iss. 3, Pages 663-1019

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