Economic efficiency and technological change in rice production in Western Tarai District of Nepal

Date

3-1996

Abstract

This study is conducted with the twin objectives of analyzing the contribution of input intensification, efficiency gain, and technological change in explaining total factor productivity growth of rice, between two points in time and identifying the determinants of economic deficiency in rice production covering favorable and unfavorable rice-growing environments in one of the five districts of the Western Tarai belt of Nepal.

For the reference year, this study used household level data of Anandaban Village representing a favorable rice-growing environment and Ramapur village representing an unfavorable rice-growing environment collected by Dr. G. B. Thapa in 1987 in connection with his Ph D dissertation at Cornell University. Both villages are located in Rupendehi District, one of the five Tarai districts of the Western Development Region of Nepal. For the second point data, the author repeated the survey in the same households in 1993.

The study followed the econometric approach in decomposing total factor productivity growth into input intensification effect, efficiency effect, and technology effect using covariance and panel data models. Both models gave consistent results and reinforced the conclusions and implied policies efficiency in both villages. Age of household head and farm size are negatively related to efficiency. Average education level of household members engaged in agriculture, number of adults engaged in agriculture, and use of farmyard manure are positively related to efficiency. The potential gain in rice production from policies designed to influence such factors, expected in the range of around 10 percent in the irrigated village and around 30 percent in the rainfed village, indicated higher payoffs of efficiency enhancing policies in the rainfed village compared to irrigated village.

Decomposition of total factor productivity growth of rice between 1987 and 1993 indicated that around 50 percent of growth in total factor productivity in both villages came from expansion of conventional inputs. This, together with the existing rice production technology (both average and frontier) characterized by decreasing returns to scale in both villages, would disfavor pursuing of input expansion strategy of the past in expanding rice output and would favor an alternate strategy having potential to expand rice output rapidly in the future.

In the irrigated village, improvement in technical efficiency which also implied technological change, contributed about 50 percent of total factor productivity growth between 1987 and 1993. However, in the rainfed village where technological change is accompanied by improvement in technical efficiency, change in technology accounted for around 29 percent of total factor productivity growth and improvement in technical efficiency accounted for around 23 percent.

Document Type

Dissertation

Degree

Doctor of Philosophy in Agricultural Economics

College

Graduate School (GS)

Adviser/Committee Chair

Mahabub Hossain

Committee Member

Isabelita M. Pabuayon, Agnes C. Rola, Roberto R. Garrido

Language

English

LC Subject

Rice--Nepal

Location

UPLB Main Library Special Collections Section (USCS)

Call Number

LG 996 1996 A14 P68

Notes

Doctor of Philosophy(Agricultural Economics)

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