Volume 8, Issue 1, September 2014, Pages 177–184
Shahid Ali1 and Munir Khan2
1 Department of Agricultural & Applied Economics The University of Agriculture, Peshawar, Pakistan
2 Professor, Department of Agricultural & Applied Economics, The University of Agriculture, Peshawar, Pakistan
Original language: English
Copyright © 2014 ISSR Journals. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
This study determined technical efficiency of wheat farmers in Khyber Pakhtunkhwa, Pakistan. Data from 300 wheat growers were collected through multistage stratified random sampling technique. Maximum likelihood estimation technique was applied to estimate stochastic frontier Cobb-Douglas production function to estimate the level of technical efficiency in wheat farming. Results showed that explanatory variables i.e., land under wheat crop, labor, chemical fertilizer, and tractor plough were statistically significant. The estimated elasticity for these variables indicated that a one percent increase in land under wheat crop, labor, chemical fertilizer and tractor plough would raise the wheat yield by 0.126, 0.248, 0.081, 0.226 and 0.066 percent respectively. The coefficient of farm yard manure was found insignificant. The estimated value of technical efficiency ranges from 39 to 94 per cent, with an average of 64 per cent. This means that if an average farmer opts to attain the technical efficiency level of its most efficient counterpart, then wheat yield could be increased by 32 per cent. Similarly the most technically inefficient farmer could enhance wheat yield by 58 per cent. Farmers' age, farming experience, farmer' education and land under wheat crop were major determinants of technical inefficiency. The relationship between farmers' age and technical inefficiency was positive and statistically significant implied that technical efficiency decreases with the increase in the farmers' age. The coefficient of farming experience was negative but statistically insignificant. The coefficient of farmers' education was negative and statistically significant which implied that inefficiency decreases with increase in the farmers' education in the study area. The relationship between technical inefficiency and land under wheat crop was positive suggesting that those farmers with relatively large farm size under wheat crop are technically inefficient but the coefficient is insignificant. It is suggested the use of more labor and tractor plough hours would increase wheat production in the country. Government of Pakistan should focus on formal as well as informal education in the country. Government should also encourage educated and young people to participate in agriculture particularly wheat growing.
Author Keywords: Wheat, technical efficiency, stochastic frontier production function, Khyber Pakhtunkhwa, Pakistan.
Shahid Ali1 and Munir Khan2
1 Department of Agricultural & Applied Economics The University of Agriculture, Peshawar, Pakistan
2 Professor, Department of Agricultural & Applied Economics, The University of Agriculture, Peshawar, Pakistan
Original language: English
Copyright © 2014 ISSR Journals. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Abstract
This study determined technical efficiency of wheat farmers in Khyber Pakhtunkhwa, Pakistan. Data from 300 wheat growers were collected through multistage stratified random sampling technique. Maximum likelihood estimation technique was applied to estimate stochastic frontier Cobb-Douglas production function to estimate the level of technical efficiency in wheat farming. Results showed that explanatory variables i.e., land under wheat crop, labor, chemical fertilizer, and tractor plough were statistically significant. The estimated elasticity for these variables indicated that a one percent increase in land under wheat crop, labor, chemical fertilizer and tractor plough would raise the wheat yield by 0.126, 0.248, 0.081, 0.226 and 0.066 percent respectively. The coefficient of farm yard manure was found insignificant. The estimated value of technical efficiency ranges from 39 to 94 per cent, with an average of 64 per cent. This means that if an average farmer opts to attain the technical efficiency level of its most efficient counterpart, then wheat yield could be increased by 32 per cent. Similarly the most technically inefficient farmer could enhance wheat yield by 58 per cent. Farmers' age, farming experience, farmer' education and land under wheat crop were major determinants of technical inefficiency. The relationship between farmers' age and technical inefficiency was positive and statistically significant implied that technical efficiency decreases with the increase in the farmers' age. The coefficient of farming experience was negative but statistically insignificant. The coefficient of farmers' education was negative and statistically significant which implied that inefficiency decreases with increase in the farmers' education in the study area. The relationship between technical inefficiency and land under wheat crop was positive suggesting that those farmers with relatively large farm size under wheat crop are technically inefficient but the coefficient is insignificant. It is suggested the use of more labor and tractor plough hours would increase wheat production in the country. Government of Pakistan should focus on formal as well as informal education in the country. Government should also encourage educated and young people to participate in agriculture particularly wheat growing.
Author Keywords: Wheat, technical efficiency, stochastic frontier production function, Khyber Pakhtunkhwa, Pakistan.
How to Cite this Article
Shahid Ali and Munir Khan, “ESTIMATION OF TECHNICAL EFFICIENCY OF WHEAT FARMING IN KHYBER PAKHTUNKHWA, PAKISTAN: A STOCHASTIC FRONTIER APPROACH,” International Journal of Innovation and Applied Studies, vol. 8, no. 1, pp. 177–184, September 2014.
