Technical Efficiency of Rural Nepalese Farmers as Affected by Farm Family Education and Extension Services

Bhatta, Kiran Prasad and Ishida, Akira and Taniguchi, Kenji and Sharma, Raksha (2006): Technical Efficiency of Rural Nepalese Farmers as Affected by Farm Family Education and Extension Services. Published in: Journal of Rural Economics , Vol. 2006, No. Special Issue (1 December 2006): pp. 316-323.

Abstract

An analysis of agricultural productivity revealed that capital, that is, inputs, other than land and labor, is an important production input that is also significant. Land also has a positive and significant contribution. Family labor is positive; however, hired labor is negative, though both are insignificant. Moreover, the technical inefficiency model revealed that agricultural extension services provided by non-governmental organizations have a positive and significant contribution, and it increases technical efficiency of the farm. Therefore we recommend policy that increases the role of non-governmental organizations in providing agricultural extension services. Similarly, the share of educated persons per household is also significantly and positively related to technical efficiency, so providing educational services to these households may also be helpful. However, in contrast to our expectation, government extension is found to have a negative effect on efficiency, though it is insignificant. As we can expect, because governmental organization takes the lion's share in terms of coverage, policies should be made favorable to improve their performance in providing agricultural extension services. An analysis of technical efficiency on farms revealed that on average they are operating well below the frontier, with the average technical efficiency being 69%; obviously there is ample room for improvement. With little changes in the production process, technical efficiency of the selected farms could be increased on average by up to 30%.

• Item Type: MPRA Paper
• Language: English
• Keywords: Technical Efficiency, Nepal, Farming, Agricultural Extension Services, NGO Extension
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q16 - R&D ; Agricultural Technology ; Biofuels ; Agricultural Extension Services; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location > R32 - Other Spatial Production and Pricing Analysis; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture ; Natural Resources ; Energy ; Environment ; Other Primary Products

References

Adams, R. H. "Agricultural Income, Cash Crops, and Inequality in Rural Pakistan". Economic Development and Cultural Change, Vol. 43 No. 3, 1995, pp. 467-491.

Ali, M. "Quantifying the Socio-Economic Determinants of Sustainable Crop Production: An Application to Wheat Cultivation in the Tarai of Nepal". Agricultural Economics, Vol. 14, 1996, pp. 45-60.

Battese, G. E. and T. J. Coelli. "Prediction of Firm-Level Technical Efficiencies with a Generalized Frontier Production Function and Panel Data". Journal of Econometrics, Vol. 38, 1988, pp. 387-399.

Battese, G. E. and T. J. Coelli. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data". Empirical Economics, Vol. 20, 1995, pp. 325-332.

Belbase, K. and R. Grabowski. "Technical Efficiency in Nepalese Agriculture". Journal of Developing Areas, Vol. 19, 1985, pp. 515-525.

Bravo-Ureta, B. E. and R. E. Evenson. "Efficiency in Agricultural Production: The Case of Peasant Farmers in Eastern Paraguay". Agricultural Economics, Vol. 10, 1994, pp. 27-37.

Chaudhury, N. "Efficiency and Productivity of Nepalese Agriculture". Doctoral thesis submitted to Department of Economics, Michigan State University, USA, 2001.

Evenson, R. E. and G. Mwabu. "The Effect of Agricultural Extension on Farm Yields in Kenya". African Development Review, Vol. 13 No. 1, 2001, pp. 1-23.

FAO. FAOSTAT - Online database. http://faostat.fao.org. 2005/12/22.

Huffman, W. E. "Decision Making: The Role of Education". American Journal of Agricultural Economics, Vol. 56 No. 1, 1974, pp. 85-97.

Kalirajan, K. P. "An Econometric Analysis of Yield Variability in Paddy Production Function". Canadian Journal of Agricultural Economics, Vol. 29, 1981, pp. 283-294.

Kalirajan, K. P. "On Measuring Economic Efficiency". Journal of Applied Econometrics, Vol. 5 No. 1, 1990, pp. 75-85.

Owens, T., J. Hoddinott and B. Kinsey. "The Impact of Agricultural Extension on Farm Production in Resettlement Areas of Zimbabwe". Economic Development and Cultural Change, Vol. 51 No. 2, 2003, pp. 337-357.

Prennushi, G. "Nepal: Poverty at the Turn of Twenty-First Century". Report No. IDP 174, World Bank, Washington DC, USA, 1999.

Pudasaini, S. P. "The Effects of Education in Agriculture: Evidence from Nepal". American Journal of Agricultural Economics, Vol. 65 No. 3, 1983, pp. 509-515.

Reynar, R. and T. Bruening. "Agricultural Extension Issues: Perceptions of Bangladesh T and V Extension Personnel". Journal of International Agricultural and Extension Education, Vol. 3 No. 1, 1996, pp. 53-62.

Shapiro, K. H. "Efficiency Differentials in Peasent Agriculture and Their Implications for Development Policies. Journal of Development Studies, Vol. 19, 1983, pp. 179-190.

Ueda, T. "From Whom Do Farmers Learn? An Analysis of Technical Efficiency Determinants for the Indian Green Revolution". Doctoral thesis submitted to Pennsylvania University, USA, 2002.

Weir, S. "The Effects of Education on Farmer Productivity in Rural Ethiopia". WPS99-7, Department of Economics, University of Oxford, UK, 1999.