Abstract
This study was conducted to evaluate technical and allocative efficiencies of rice farming in the low country rainfed water regime of the Gampaha and Kalutara districts of Sri Lanka. Data of 2009 Yala season, and 2009/2010 Maha season were collected from 49 rainfed farms per season of the Gampaha district and 50 rainfed farms per season of the Kalutara district. Stochastic frontier production functions of Cobb-Douglas form with an intercept dummy variable representing the Kalutara district were estimated for each season. Values of γ above 0.78 in the Yala season and above 0.9 in the Maha season indicated that inefficiencies explain a major portion of the total product variation. The average technical efficiencies were 0.67 in Gampaha and 0.73 in Kalutara districts in the Yala season, and 0.76 in Gampaha and 0.78 in Kalutara in the Maha season. The average allocative efficiencies were 0.59 in Gampaha and 0.46 in Kalutara in the Yala season, and 0.63 in Gampaha and 0.53 in Kalutara in the Maha season. Increase of technical efficiency has resulted in potential cost savings of approximately 33 % in Gampaha and 27 % in Kalutara district in the Yala season, and 24 % in Gampaha and 22 % for Kalutara in the Maha season. About 40 % of the cost of resources in the Kalutara district and 0.27 of that in the Gampaha district in the Yala season, and 37 % of the resource cost in the Kalutara district and 29 % of that in the Gampaha district could be saved by raising allocative efficiency. The average cost savings indicated by raising both forms of efficiencies were Rs.29,375 per farm (Rs 79,325/ha) in the Kalutara district and Rs 27,645 per farm (Rs 85,870/ha) in the Gampaha district during the Yala season while it was Rs. 29,190 per farm (Rs 89,260/ha) in the Kalutara district and Rs. 22,325 per farm (Rs 81,230/ha) in the Gampaha district in the Maha season. Costs of allocative inefficiencies were more prominent in both seasons in the Kalutara district and in the Maha season in Gampaha district, whereas costs of technical inefficiencies were more important in the Gampaha during Yala season.
Highlights
Rainfed area constitutes about 24 % of the national rice cultivated extent, and contributes to around 19 % of the annual national rice production in Sri Lanka
The technical efficiency index (TE[i]), allocative efficiency index (AE), and associated economic efficiency (EE) index in the input-input space introduced and elaborated by Farrell (1957) were used in this study to measure the efficiency of production
The mean labour use in each district during the Yala season was higher than that during the Maha season, which was mainly due to the higher labour requirement for water management during the Yala season (Table 1)
Summary
Rainfed area constitutes about 24 % of the national rice cultivated extent, and contributes to around 19 % of the annual national rice production in Sri Lanka. Districts in the low country wet zone contribute to 36 % of rainfed rice. Abandonment of land is a common incidence in these areas, mainly due to relatively low productivity and profitability (Warnakulasooriya et al, 2008). Land abandonment raises both onfarm and off-farm costs to farmers in the form of increased costs on initial land preparation/canal clearing, and thereby leads to further declining of profitability and impose environmental costs to the society. Raising profitability of rainfed farming in the low country wet zone would dissuade abandoning of rice lands and induce farmers to continue rice farming. Raising technical and allocative efficiencies of farmers would favourably affect farm profitability
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