Comparative analysis of profit efficiency of farm households under livestock-based farming systems in saline and normal areas of West Bengal using stochastic frontier approach

The present study analysed the impact of salinity by comparing the economics of different livestock-based farming systems in saline and normal areas of West Bengal. The study also identified the factors affecting profit and inefficiency functions which will help the policy makers and farmers to adapt to this natural hazard. The study revealed that, in saline areas, as concentrate price and farm capital used was increased by one%, profit would reduce by 0.40 to 0.71% and 0.41 to 0.45%, respectively. In case of normal areas, one% increment of concentrate price and farm capital used would reduce the profit by 0.24 to 0.46% and 0.43 to 0.52%, respectively. Gamma (a) value indicated that 90 to 96%, was also statistically significant. Likelihood Ratio (LR) statistics for all the farming systems were significant. From the mean of profit efficiency scores, it is revealed that households under all the farming systems except cattle+goat+crop+fish (S3) were on an average less than 70% efficient in the saline area, but in normal areas the households under different farming systems were on an average 70% or more efficient. Irrespective of the saline and normal areas, it was found that age, level of education, farming experience, household size, number of animals, land under cultivation, access to credit and access to information had a negative effect on profit inefficiency. Number of animals and croplands had a greater effect on the reduction of profit inefficiency than other variables. In saline areas, one% increase in the number of animals and cropland would reduce profit inefficiency by 0.22 to 0.59% and 0.22 to 0.35%, respectively. One% increase in the number of animals and cropland would reduce profit inefficiency by 0.28 to 0.81% and 0.29 to 0.93%, respectively in normal areas.