How Inefficient are Small-Scale Rice Farmers in Eastern India Really? Examining the Effects of Microtopography on Technical Efficiency Estimates

Abstract

The article analyzes the effect of failing to control for differences in land types (defined by position on a low scale toposequence) on estimates of farm technical efficiency for rice farms in eastern India. In contrast to previous research, we find that farms appear to be considerably more technically efficient when efficiency estimates are carried out at the plot level and control for plot characteristics rather than at a more aggregated level without such control. Estimates show farms cultivating modern varieties are technically efficient, while farms planted with traditional varieties operate close to the production frontier on less productive lands (upland and mid-upland). However, significant technical inefficiency is found on more productive lands (medium and lowland plots) planted with traditional rice varieties.

Keywords: technical efficiency, stochastic frontier production function, productivity, rice, India

JEL Classification: O13, O33, Q12, Q16