Technical efficiency of milk production in Tamil Nadu of India: Frontier production function approach

A study was under taken to analyse the technical efficiency of milk production in the state of Tamil Nadu. By applying multidimensional scaling method, the state of Tamilnadu was segmented into four homogenous milk zones based on the resource endowment of the districts, favourable for dairy development. From the four zones, four districts viz., Kanchipuram, Erode, Nagappattinam and Thoothukudi were selected to represent each zone based on the factor scores obtained by these districts in each zone. A total sample size of 480 dairy farmers were selected for the present study. To estimate the level of efficiency in milk production, stochastic frontier production function was used. The farm specific technical efficiencies revealed that the distribution of most efficient elite group (Technical efficiency more than 90 per cent) of dairy farmers was the highest in Erode district (42.5 per cent) followed by Kanchipuram district (39.17 per cent) and Nagapattinam district. The mean technical efficiency was 85.5 per cent, 85.8 per cent, 82.7 per cent and 77.4 per cent respectively for Kanchipuram, Erode, Nagapattinam and Thoothukudi district indicating that on an average the sample farmers tended to realise 77.4 to 85.8 per cent of their technical abilities and the remaining per cent of their technical abilities were not realized.