Md. Mehedi Hasan Chokdar, Md Elias Hossain, Md Asduzzaman Kiron
Abstract
Jute production plays a major part in the economy of Bangladesh by supporting over 25 million people employed in cultivation and processing, which contributes considerably to export revenues. While earlier studies have concentrated on either technical or economic efficiency separately, the present study contributes to the field by jointly estimating technical, allocative, and economic efficiencies applying a two-stage DEA-Tobit technique to estimate the efficiency of jute production. A sample size of 360 from the district Faridpur, which is nationally known for high-quality jute production that makes it a critical focus point, has been chosen as the area of the present study. The paper also suggests that its results may serve as benchmarks that apply to comparable agroecological zones in South Asia. On average, technical, allocative, and economic efficiencies of the farms were found to be 0.87, 0.93, and 0.82, respectively, whereas their present inefficiencies are 12.4%, 17.7%, and 6.3%. Although TE and AE are 87.6% and 93.7% respectively, farmers are inefficient in obtaining the optimum level of output. Therefore, farmers may produce a specified amount of output at the lowest feasible cost by decreasing the cost of jute production by 17.7%, given the available resources. Moreover, a second-stage Tobit regression employed in the present study has demonstrated that farm-specific factors such as age, family size, education level, farming experience, land size, kind of seed, and the profession of the head of the household, etc. all have a substantial influence on the efficiency of the farms. These findings along with the second-stage Tobit regression that links efficiency to farm-specific factors, give empirical insights for targeted agricultural policy and rural poverty reduction, therefore attracting the educated young to choose agriculture as a career option. The research thereby fills a vacuum in multi-dimensional efficiency studies and facilitates both regional and international development policies.
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DOI: https://doi.org/10.46676/ij-fanres.v7i1.592
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