Technical efficiency analysis of shrimp farms in Andhra Pradesh, India using stochastic frontier approach

Abstract

Brackishwater aquaculture sector is dominated by the exotic vannamei shrimp farming, which is the economic engine of Indian aquaculture. In 2019-20, exports of 12,89,651 t of Indian marine products fetched foreign exchange worth ₹46,662.85 crores and farmed shrimps accounted for about two-thirds of the shrimps exported. Shrimp farming is export oriented and market price often fluctuates widely impacting the profitability significantly. We conducted this study to estimate technical efficiency of the shrimp farmers In Nellore District, Andhra Pradesh State which tops in shrimp aquaculture in the country. The data were collected through structured questionnaire using personal interview from 80 farmers during COVID 2020 pandemic period. The farm specific technical efficiency varied from 75 to 94% with a mean of 93%. The estimates of the discrepancy parameter γ indicated that 93% of the difference between the maximum possible output and actual output were due to differences in technical inefficiencies of farmers Feed and labour are the significant variables compared to other variables. The results indicated that farmers need to be encouraged to apply more feed to increase shrimp production. Keywords: Stochastic production frontier, Sustainability, Technical efficiency, Vannamei shrimp aquaculture