Analysis of Technical and Allocative efficiencies among Cotton Producers in Nagpur District, Maharashtra State, India

Abstract

This article assessed the technical and allocative efficiencies of cotton farmers in Nagpur district, Maharashtra, India. A multi-stage sampling technique was adopted in selecting one hundred and twenty farmers. Data were collected using structured questionnaires. Descriptive statistics, stochastic frontier production function and inefficiency model were employed for data analysis. Results from the review of socioeconomic characteristics reveal that cotton production in the study area was dominated by small and marginal farmers (96.7%). Majority of the cotton producers (84.2%) had small family size (2-6 persons) with low literacy rate. The results obtained from the stochastic frontier production function reveal that farm size and labour were the major determinants of cotton production in the study area. The mean technical efficiency estimate was 78%, implying that farmers are highly efficient although cotton output can still be raised by 22% through better resource allocation without incurring additional cost. Estimates of Allocative efficiency indicated that agrochemical was underutilized while fertilizer and labour were over utilized. Results from the inefficiency model indicate that educational status of the farmers was the major source of inefficiency in cotton production. The study therefore suggests intensive awareness campaign and regular extension visits by concerned authorities in order to facilitate better usage of improved technology packages aimed at enhancing yield and farm income.