Farm Specific Economic Efficiency of Fish Production in South Tripura District: A Stochastic Frontier Approach

Abstract

Fish is an important item of food to almost all the people (about 95 per cent) of Tripura. The aqua-resources of Tripura include reservoirs, lake, river and rivulets (10,000 ha), ponds/tanks (9,072 ha) and mini barrages (4,270 ha). All these aquaresources, however, encompass only 2.22 per cent of the total geographical area of the state of Tripura. There were about 93,870 fish farmers in the state during 200102. The present average production from culture fish in the state is very low (about 1,200 kg/ha/year), which needs to be increased up to 3,000 kg/ha/year to make the state self-sufficient in fish production (Sarkar, 2002). The increase in production is possible only through improvement in productivity, which can be increased through one or a combination of factors, namely, technology, the quantities and types of resources used and the efficiency with which the resources are used. Of the various determinants, improvement in the efficiency of resources already at the disposal of the farmers is of great concern (Goyal et al., 2006) and widely recognised by researchers and policy makers alike (Arsalanbod, 2005). An underlying premise behind efficiency estimation is that, if the farmers are not making efficient use of the existing technology, their efforts designed to improve efficiency would be more cost effective than introducing new technologies as a means of increasing agricultural output (Bravo-ureta and Evenson, 1994). The economic efficiency (EE) is composed of technical efficiency (TE), which is connected to technology, refers to use the minimal possible combination of inputs for producing a certain output (input orientation) or to obtain maximum possible level of output (i.e., frontier output) at the given level of technology (output orientation). EE also includes allocative efficiency (AE) as Farrell (1957) called it price efficiency, which refers to optimal combination of inputs at given input prices, i.e., connected to market (Brummer et al., 2002). Both TE and AE are important to achieve the overall economic efficiency in resource use, i.e., maximum profit at given level of technology and input prices.