Production Efficiency of Market Stakeholders of Paddy Crop: A Comparative Study of Punjab and Uttar Pradesh

Abstract

The present study analyzed the efficiency of the beneficiaries of the agricultural market, viz., FCI and Mandi Samities, concerning two states (Punjab and Uttar Pradesh) by employing a stochastic frontier model on cross-sectional data. Two hundred eighty samples were collected to analyze the production efficiency of crucial inputs such as land, irrigation, fertilizer, manure, seed, pesticide, equipment and labour. The study revealed that production efficiency was relatively higher among Punjab farmers than in Uttar Pradesh. The study recognized the role of socio-economic factors, specifically land inputs, education, fertilizer, pesticide, and human labour, which accounted for high efficiency in the regulated market of the Punjab state. The study recommended adequate public policies to prevent the ongoing diminution of land holdings irrespective of state. Further, Punjab had more institutionally commercialized agriculture, and Uttar Pradesh lags in it. Uttar Pradesh needs to boost the aforementioned socio-economic factors through policy interventions to increase the efficiency of the participating farmers in the market. Keywords: Agriculture, production efficiency, stochastic production frontier. JEL Codes: C00, C14, Q10, Q13.