Productive efficiency of rice farming under rainfed conditions in Gampaha and Kalutara districts of Sri Lanka

Abstract

This study was conducted to evaluate technical and allocative efficiencies of rice farming in the low country rainfed water regime of the Gampaha and Kalutara districts of Sri Lanka. Data of 2009 Yala season, and 2009/2010 Maha season were collected from 49 rainfed farms per season of the Gampaha district and 50 rainfed farms per season of the Kalutara district. Stochastic frontier production functions of Cobb-Douglas form with an intercept dummy variable representing the Kalutara district were estimated for each season. Values of γ above 0.78 in the Yala season and above 0.9 in the Maha season indicated that inefficiencies explain a major portion of the total product variation. The average technical efficiencies were 0.67 in Gampaha and 0.73 in Kalutara districts in the Yala season, and 0.76 in Gampaha and 0.78 in Kalutara in the Maha season. The average allocative efficiencies were 0.59 in Gampaha and 0.46 in Kalutara in the Yala season, and 0.63 in Gampaha and 0.53 in Kalutara in the Maha season. Increase of technical efficiency has resulted in potential cost savings of approximately 33 % in Gampaha and 27 % in Kalutara district in the Yala season, and 24 % in Gampaha and 22 % for Kalutara in the Maha season. About 40 % of the cost of resources in the Kalutara district and 0.27 of that in the Gampaha district in the Yala season, and 37 % of the resource cost in the Kalutara district and 29 % of that in the Gampaha district could be saved by raising allocative efficiency. The average cost savings indicated by raising both forms of efficiencies were Rs.29,375 per farm (Rs 79,325/ha) in the Kalutara district and Rs 27,645 per farm (Rs 85,870/ha) in the Gampaha district during the Yala season while it was Rs. 29,190 per farm (Rs 89,260/ha) in the Kalutara district and Rs. 22,325 per farm (Rs 81,230/ha) in the Gampaha district in the Maha season. Costs of allocative inefficiencies were more prominent in both seasons in the Kalutara district and in the Maha season in Gampaha district, whereas costs of technical inefficiencies were more important in the Gampaha during Yala season.