Efficiency in the Rice Farming: Evidence from Northwest Bangladesh

Abstract

Rice production takes a leading role in the agricultural sector of Bangladesh contributing to 35% of the gross value added of total agricultural production (December 2011), employing 48% of the rural workforce. While the country achieved self-sufficiency in rice, continuous population growth requires Bangladesh to further increase the production of this staple cereal. However, considering the steady decline of the cropped area and available rural workforce, such increase could be reached by increasing the efficiency in rice production. This study aims to examine the resource use efficiency and its drivers in the performance of rice farms in the Northwest region of Bangladesh, which is considered as the food bowl of the country. The study applied a two-stage approach of Data Envelopment Analysis followed by Ordinary Least Squares to estimate the impact of contextual variables on rice production. The empirical research results show that 83% of rice farms among the sample of 184 farms are efficient being located on efficiency frontier, while the 2% farms are inefficient and could improve their efficiency. The remaining 15% of farms are at level that is close to the efficiency frontier. Such factors as the cost of irrigation, pest control, and crop harvesting and carrying are the main drivers of efficiency amongst the considered rice farms.