Eco-efficiency of high-yielding variety rice cultivation after accounting for on-farm environmental damage as an undesirable output: an empirical analysis from Bangladesh

Abstract

This study computes the eco-ei¬ƒciency of high-yielding variety (HYV) rice production by including an on-farm environmental damage index (OFEDI) as an undesirable output using data envelopment analysis. It then identii¬es its determinants by applying an interval regression procedure on a sample of 317 farmers from north-western Bangladesh. Results reveal that the mean level of the OFEDI-adjusted production ei¬ƒciency (i.e. eco-ei¬ƒciency) is 89 per cent, whereas ignoring OFEDI adjustment (i.e. with OFEDI = 0) reduces the mean level of ei¬ƒciency to 69 per cent, implying that the production of undesirable output or on-farm environmental damage induces an ei¬ƒciency loss of 20 per cent with signii¬cant dii¬€erences across regions. The proportion of farmers’ income from HYV rice agriculture, land ownership, extension services and socio-environmental living standard are the signii¬cant determinants of improving eco-ei¬ƒciency. Policy implications include investments in extension services and land reform measures to increase land ownership, which will synergistically improve eco-ei¬ƒciency of HYV rice production in Bangladesh.