Abstract
This paper reports the measure of total factor productivity change (TFPCH) for the Sudanese sugarcane factories: An empirical analysis with reference to Sudanese sugar companies (Kenana, Gunied, New Halfa, Sinnar and Assalaya). Based on Data Envelopment Analysis Program (DEAP) Software Version 2.1, using model of input– oriented Malmquist indices of total factor productivity (TFP). Relevant secondary data were collected and analyzed to meet the stated objectives. This paper aimed to decompose TFPCH into two components: Technological change (TECH) and technical efficiency change (EFCH) and the latter was further divided into scale efficiency change (SEFCH) and pure efficiency change (PEFCH). In the study on Sudanese sugarcane plants, the innovation was improving up and down of TECH over time. Scale efficiency operating in Kenana was remained constant return to scale, and total factor productivity was positive. For measuring the scale efficiency operating in Sudanese Sugar Company the results suggest that the scale efficiency was constant return to scale in Gunied and New Halfa compared to increased return to scale in Sinnar and Assalaya. The study recommended that the policy maker in the Sudanese Sugar Company and managers of other sugar factories should make effort to benefit from added value of sugar industry through downstream processes of sugarcane by-product such as molasses bagasse and filter cake, which could be utilized usefully for animal feed, energy and ethanol production.
Highlights
The sugar commodity plays a significant role in national economy of Sudan
The competitiveness of this industry over time could be measured by efficiency and productivity analysis from an applied perspective, measuring efficiency is important because this is the first step in a process that might lead to substantial resources saving [35]
It is to be noted that, the shifts in technology are to be measured locally for the observation at t and t+1. This implies that the whole technology need not behave uniformly and the technological regress is possible Scale inefficiency change would not indicate whether the change was due to operation of the decision making unit (DMU) at increasing returns to scale (IRS) or at decreasing returns to scale (DRS) or at constant return to scale (CRS) To know this technical efficiency for the with, DMU, the estimated input-orientated efficiency score θ i under constant returns to scale is given by solving the following linear programming model:
Summary
The sugar commodity plays a significant role in national economy of Sudan. It produced locally to fill the gap of sugar consumption, saving hard currency, and improving the trade balance. It is important to know whether this industry is competitive enough to face these local, regional and global challenges The competitiveness of this industry over time could be measured by efficiency and productivity analysis from an applied perspective, measuring efficiency is important because this is the first step in a process that might lead to substantial resources saving [35]. These resource savings would have important implications on both policy formulation and factories management. This study was aimed to provide policy recommendations that would help the Sudanese sugarcane industry administration to stabilize the price level and reduce cost of production and thereby increase tenants, income and their welfare
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