Technical Efficiency and its Determinants: A Case Study of Fruit and Vegetable Growers in Tamil Nadu

The paper has measured the technical efficiency (TE) of farming households who mainly grow fruits and vegetable crops in Tamil Nadu and has identified the determinants of technical efficiency based on Cobb-Douglas stochastic frontier production function. The study is based on the primary survey of 240 households conducted during December 2010 to February 2011 in Salem, Trichy and Theni districts. The reference period of survey was July 2009 to June 2010. The mean TE level has been estimated to be 0.60 in the study region. The results have indicated that the farmers were technically more efficient in Trichy than in Theni and Salem districts. One of the major reasons for the difference was the irrigation facilities in the study region. Testing for equality indicated that TE did not vary statistically or significantly across farm-sizes. However, the larger landholdings had higher TE than smaller landholdings. Thereby, the null hypothesis that there exists an inverse relation between farm size and TE, has been rejected by the study. The results have shown that TE was influenced positively by infrastructural facilities. In the case of other variables such as level of education and access to credit, the sign of the coefficients showed a positive relationship with TE. This implies that TE can be improved through improvements in these explanatory factors in the state.