Economic Analysis of Pecan Nut Production: An Application of Input Oriented DEA Model

The economics of pecan nut production in Poonch district of Jammu & Kashmir state was assessed using input oriented DEA model. The NPV and profitability index were positive and the internal rate of return (IRR) was 14 per cent, which shows that investing in pecan nut orchard will be a profitable venture until the market interest rate remains below 14 per cent. The results of input oriented model revealed that growers were efficient in terms of pecan nut production at the given level of inputs, with mean overall technical efficiency of 0.922, mean pure technical efficiency of 0.961 and mean scale efficiency of 0.959. The mean allocative and cost efficiencies were 0.718 and 0.665, respectively. The level of input use in pecan nut was extremely low and if inputs are increased, the output would increase more than the use of inputs. The average allocative and cost efficiency of pecan nut growers was less than the average technical efficiency, which shows that pecan nut growers were relatively more technical than cost efficient.