Measuring the Efficiency of Rice Production in Myanmar Using Data Envelopment Analysis

Abstract

Rice production in Myanmar is constrained by biophysical and socioeconomic factors. Nonetheless, efficient farm practices can enhance productivity, farmers’ profit, and the price and quality of marketed rice. This study analyzed the profitability and efficiency of rice production in the Ayeyarwaddy Region of Myanmar and identified the influencing socioeconomic characteristics and farm-specific characteristics. Primary data from 130 randomly sampled farmers in the Ayeyarwaddy Region were collected. Data were analyzed using descriptive statistics, data envelopment analysis (DEA), and Tobit regression analysis. According to the average overall technical efficiency, farmers have an additional rice yield potential of 25 percent that can be attained by improving input utilization. The best practices benchmarked in the region showed that technical inefficiency is caused by excessive use of inputs, especially herbicides and animal power. Most rice farms in this study suffer from allocative and economic inefficiencies resulting from wrong combinations of input usages. The average economic efficiency level indicates that farmers can increase their profitability by 57 percent if they adapted to reduce input costs. Moreover, efficiency was significantly higher for farmers who were younger, better educated, more experienced, had access to agricultural extension services, and cultivated the Aye Yar Min variety. Efficiency can be improved by setting up farmers’ cooperatives to increase the scale of operations. Moreover, the government should intervene to reduce input prices, control the quality of input seeds, and install an appropriate financial crop insurance mechanism. Effective and systematic agricultural extension services should be widespread to improve the efficiency and decision-making skills of rice farmers in the study area.