Farm Specific Technical Efficiency in Paddy Production and its Determinants in Punjab

This paper employs stochastic frontier technique to investigate the farm specific technical efficiency in paddy cultivation in Punjab. Farm level data taken at two points of time from the ’cost of cultivation’ scheme was analysed for this purpose. The analysis reveals that on sample farms, 86.7 per cent and 97.5 per cent variation in paddy output in 2001–02 and 2011–12 respectively was on account of the farm level differences in technical efficiency. Overtime the average level of technical efficiency in paddy cultivation had declined marginally from 86 per cent in 2001–02 to 83 per cent in 2010–11. Results on second step regressions relied on two-limit Tobit model indicate that during 2001–02, farm level efficiency differences in paddy cultivation were explained significantly by size of operational area, tenancy level, area under paddy, education, level of fragmentation and regional effect. Similarly, area under paddy, age of farmer, investment in irrigation and level of fragmentation were the significant factors in determining the level of technical efficiency among the farmers in 2011–12.