Technical Efficiency of Smallholder Dairy Farms in Rural Assam: A Double Bootstrap Data Envelopment Analysis Approach

Abstract

Analysing a sample of 245 smallholder rural dairy farms in Assam, it is found that most dairy farms operate at technically inefficient level. The analysis of input-oriented conventional and bias-corrected data envelopment analysis (DEA) procedure entails that most farms produce milk below the production frontier with underlying scope of reducing variable input component up to 50% to retain the same level of output. Further, exploring the bias-corrected efficiency score determinants, it is found that input use decision is superior for male-headed households, farms that are involved in fodder cultivation, farms with proximity to markets and resource poor farmers whose dairy farming is mostly a principal source of income. The findings of the study indicate presence of ample scope and potential to leverage the technical efficiency (TE) and thereby increase the socio-economic wellbeing of the smallholder dairy farm households in the state. The study also points towards the need for sensitising farmers about the improved dairy farm technologies such as artificial insemination to produce more crossbred cattle along with building a strong network of extension machineries.