The Technical Efficiency of Transplanted Aman Rice Farms in Bangladesh: A Parametric and Nonparametric Approach of Efficiency

Abstract

The comparison of technical efficiency has been estimated by parametric and nonparametric production model for agricultural rice farms. This paper employs a translog stochastic frontier model to explain the source of inefficiencies of rice farm due to socioeconomic and farm-specific variables in seven selected regions of Bangladesh. The motivational point is of “start trade” to international rice market like other Asian countries. The average efficiencies estimates of Transplanted AMAN rice farms are vary 60%-90% in stochastic frontier analysis (SFA) whereas in data envelopment analysis (DEA) the technical efficiencies estimates are vary 64% to 79%. Average technical efficienies of Dhaka, Khulna, Barisal and Rangpur were found higher through SFA than DEA. Kernel density estimates appropriates to the empirical efficiency. The results of distribution of efficiencies indicate that Dhaka, Rajshahi, Khulna, Barisal, Sylhet and Rangpur efficiency were found negatively skewed. The graphical representation of the kernel density estimates indicated that inefficiencies were presented among the farms in the all selected regions.