Volume 21: Article 1

Productivity and Efficiency of Agriculture in Dhanushadham, Nepal

Dr. Chandra Bahadur Adhikari*

Abstract: This study aims at estimating an output oriented SDF simultaneously with a technical efficiency effects model. Using 450 sample data obtained from a field survey in Janakpurdham, Nepal, the study empirically measures the TE and explores the determinants of the efficiency related to technical inefficiency. The main finding of the study is that a high level of inefficiency is present in the study area. Changes in the quantity of production inputs have a huge effect on the extent of productive efficiency. The inefficiency level is associated to farm specific characteristics. Ownership of land is the key determinant of inefficiency followed by extension service, land quality, access to credit, access to road and education. While the TE among agricultural households differs notably across farm size, medium size farms achieve the highest technical efficiency. The findings are expected to be helpful in improving TE in agriculture which can reduce poverty and inequality.

Key words: technical inefficiency; farm size; stochastic distance function; Nepal

* Centre for Nepal and Asian Study (CNAS), Tribhuvan University, Kathmandu, Nepal
Email: Chandra.adhikari@gmail.com