An Efficiency Analysis of Agro-Production businesses on Dunes: A Case of Bhakkar District of Pakistan

Abstract

Measurement of efficiency is an imperative factor in output growth. If an economy has limited resources and lacking opportunities of advanced technology, inefficiency studies will help out to show that it is probable to increase productivity by enlightening efficiency without developing the resource base or increasing new technology. In this Study we have estimated the efficiency of three types of farming systems 1) Arid conventional farming, 2) Only tree farming, 3) Border tree farming on the sand dunes of Bhakkar district in Thal region. Efficiency estimates are based on technical, scale, allocative and economic efficiencies. Data was collected with the help of questionnaire technique from 200 farmers in Bhakkar. Data Envelopment Analysis (DEA) technique was used to estimate technical, scale, allocative and economic efficiencies. The mean value of total technical efficiency, pure technical efficiency, scale efficiency, allocative efficiency and economic efficiency in conventional farming was found 0.679, 0.803, 0.786, 0.852 and 0.685 respectively. While the mean value of total technical efficiency, pure technical efficiency, scale efficiency, allocative efficiency and economic efficiency in only tree farming was recorded 0.698, 0.954, 0.517, 0.337 and 0.301 respectively. Moreover, the mean value of total technical efficiency, pure technical efficiency, scale efficiency, allocative efficiency and economic efficiency in case of Border tree farming was found as 0.966, 0.938, 0.882, 0.687 and 0.638 respectively. The results specify that new and innovative ways of tree cultivation method were relatively more efficient compared to conventional ways of agriculture. Tobit regression was used to estimate the sources of inefficiencies in these three farming systems. Tobit regression estimates further indicates that education and age are important variables in explaining technical and allocative efficiencies in innovative farming. Hence results concluded that agriculture extensions should take appropriate policy measures to enhance awareness among farmers in the area.