STOCHASTIC FRONTIER ANALYSIS OF MAIZE FARMERS IN AZAD JAMMU AND KASHMIR, PAKISTAN
Khurram Nawaz Saddozai*, Umme Rubab* and Abass Ullah Jan*
The research study was carried out to analyze the technical efficiency of maize growers through Cobb-Douglas type Stochastic Frontier Analysis in four villages of Muzaffarabad district, Azad Jammu and Kashmir (AJK), Pakistan. The proportional sampling allocation sampling technique was adopted to collect primary data from 80 sampled respondents in 2013-14. The maximum likelihood estimates of major inputs showed that seed, tractor hours, FYM and labor days have contributed significantly to increase the maize yield. However, the DAP and urea have shown no effect on maize yield. The mean technical efficiency was estimated at 83%, implying that the farmers can still enhance their technical efficiency by 11% within the given inputs and technology. The results have demonstrated that maize crop is lucrative crop in the study area as maize growers have received increasing return to scale i.e., 1.90 (Ep>1), hence economies of scale exists. The variance parameter lambda (λ) and gamma (Γ) both were significant indicating the good fitness of model and inefficiency impact, respectively. The estimated value for Γ was 0.77 underscores that 77% variation in the production frontier was explained by technical inefficiency effect. The inefficiency indices showed that farmers with more schooling years and more number of contacts with extension agents were more efficient. Contrarily, age of the farmer and large farm size have inverse relation to technical efficiency of the farmers. This research study concludes that the use of more labor and application of farm yard manure is contributing significantly. It is recommended that the high input prices may be levelled off by the regulatory authorities so that farmers can apply the required crop inputs such as DAP and urea in study area.