Efficiency of Rice Producing States in Production and Cost: A Stochastic Frontier Analysis

Abstract

This paper examines the technical inefficiency and cost inefficiency of rice production for 12 major rice producing states of India for the period 1996-2010, using cost of cultivation data provided by the Ministry of Agriculture. It has used stochastic frontier analysis of true "fixed effect Green type of model". Its finding is that the southern states perform better in terms of both technical efficiency and cost efficiency. Eastern states show positive trends of both technical and cost inefficiencies. There has been positive growth rate of fertilizer use and significantly negative trend of human labour and bullock labour use per hectare of rice production for the southern states. But in eastern states there has been a decline in the growth rate of use of human labour, bullock labour as well as fertilizer per hectare of land.