TECHNICAL EFFICIENCY ON MAIZE PRODUCTION IN SELECTED AREAS OF BANGLADESH: A STOCHASTIC FRONTIER APPROACH

Abstract

The present study was designed to analyze technical efficiency and to estimate the profitability of maize production in six villages under Harirampur and four villages under Bagha upazila of Manikgonj and Rajshahi districts respectively. Primary data were collected through random sampling from 131 farmers. The main findings of the study reveal that maize production is a profitable enterprise. Total cost of production was Tk. 107012.19 per hectare. Gross returns, gross margin were Tk. 151323.72 per hectare, Tk. 69003.91 per hectare and net returns was Tk. 44311.53 per hectare. Per hectare yields of maize was found 8563.421 kg. Benefit Cost Ratio (BCR) was found to be 1.41 which implies that one taka investment in maize production generated Tk. 1.41 in the study area. BCR were found to be 1.26 and 1.59 at Harirampur and Bagha upazila respectively. The Cobb-Douglas stochastic frontier production function was used to measure technical efficiency of maize farmers. The coefficients of parameters e.g. land preparation cost, seed and irrigation were positive where seed and irrigation were highly significant and land preparation cost was significant at 5 percent level. Technical efficiency ranged from 0.71 to 0.99 with a mean of 0.93. In the technical inefficiency effect model, experience, extension service and farm size have negative coefficients indicating that this helps in reducing technical inefficiency of maize farmers. The value γ-parameter associated with the variance in the stochastic frontier model was 0.9531, indicates that inefficiency effects have a significant contribution in determining the level and variability of output of maize farms. Among various problems, high price of seeds, natural calamities and low price of grains ranked 1 , 2 nd and 3 rd respectively on the basis of magnitude of problem faced by farmers. Development of new varieties, reduction of price of seed, fair price of produced maize, adequate extension service, available credit and storage facility can improve the present production situation.

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