Technical Efficiency and Farm Size Productivity ― Micro Level Evidence from Jammu & Kashmir

Abstract

The paper estimates the technical efficiency and the relationship between farm size and productivity efficiency. Field survey data of 461 farmers from district Pulwama of Jammu & Kashmir (India) for the year 2013-14 were used to estimate the technical efficiency by employing Non-parametric Data Envelopment Analysis. Average technical efficiency worked out to be 48%. Most of the farms were operating at low level of technical efficiency. There was also wide dispersion in technical efficiency across farm categories. Farm size and productivity efficiency relationship was found to be non-linear, with efficiency first falling and then rising with size. Large farms tend to have higher net farm income per acre and are technically efficient compared to other small farm size categories. The study further delineated the socio-economic, institutional and farm factors of technical efficiency using Two-limit Tobit Regression Model. The results showed that Occupation, Farm Experience, Household Size, Farm Size, Membership and Seed Type were found to be important determents that influence the discrepancies in technical efficiency across farm sizes. Policymakers should, therefore, foster the development of the socio-economic, institutional and farm specific factors in order to build the capacity and management skills of the farmers.

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