Technical Efficiency of Ginger Production in Ilam District of Nepal: A Stochastic Production Frontier Approach

Dikshya Khatiwada,Pappu Yadav,Durgesh Jaiswal

doi:10.1155/2022/3007624

Abstract

This study measured the level of technical efficiency among smallholder ginger growers and examined the determinants of inefficiency by employing the stochastic frontier production function. The paper used a simple random sampling technique to interview 100 ginger farmers in Ilam, a leading ginger-producing district in Nepal, with the help of a pretested interview schedule. The STATA.13 software was used to obtain both stochastic frontier estimates and the determinants of technical inefficiency. The results revealed that the average farm-level technical efficiency is 67.8% which shows the scope of increasing the technical efficiency by 32.2%. The coefficients of seed and farmyard manure were positive and showed significant relation to ginger output at a 1% and 5% level of significance, respectively. Education level, training, and membership in cooperatives had a negative and significant impact on technical inefficiency, whereas areas under ginger production had a positive impact on technical inefficiency. Hence, improving the technical knowledge of farmers through training on optimum input use complemented with motivation to join agriculture cooperatives and farmer’s associations may increase the technical efficiency of ginger growers in the study area.

Highlights

Agriculture is central to the livelihood of Nepalese people which contributes 27.6% to the national GDP (Gross Domestic Product) [1]
Since human labour and bullock hours were negatively related to ginger yield, farm mechanization must be promoted as it reduces the human labour and bullock labour required to carry out agronomic operations. is can be done by the establishment of custom hiring centres in rural areas or by the provision of small farm machinery to farmer’s groups. e empirical findings reveal that variables such as education level and training displayed negative relation to technical inefficiency. is implies that any increase in these variables decreases the technical inefficiencies. us, policy formulations should be undertaken to provide basic education to both old and young farmers
The provision of training on the efficient utilization of existing resources must be done to improve technical efficiency. e study recommends deploying agriculture trainers or extension officers in rural areas to facilitate the dissemination of new technologies

Summary

Introduction

Agriculture is central to the livelihood of Nepalese people which contributes 27.6% to the national GDP (Gross Domestic Product) [1]. Nepal is the fourth largest producer of ginger which translates to 9.2% of the world’s production in 2019, while India and China have 35.2% and 18.3% of the global share, respectively. E total area under cultivation of ginger in Nepal was 23,500 hectares (ha) with the production of 298,945 metric ton (MT) in the fiscal year 2019/20 [3]. The mean yield of ginger in Nepal is only 12.3 tons per hectare [4], which is almost 50% lower than the potential yield of 24.5 tons per hectare [5]. Ginger is identified as one of the 12 priority export products by the Nepal Trade Integration Strategy-2017 considering its strength induced by favourable geoclimatic condition and its high quality and acknowledging increasing demand in the global market.

Methods

Results

Conclusion