Technical Efficiency and its Determinants in Tomato Production in Karnataka, India: Data Envelopment Analysis (DEA) Approach

By D. S. Murthy, M. Sudha, M. Hegde, V. Dakshinamoorthy. Agricultural Economics Research Review, 2009

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Low productivity in agriculture is mainly due to the inability of the farmers to exploit the available technologies fully, resulting in lower efficiencies of production. The present study has estimated the technical and scale efficiencies of tomato-producing farms in Karnataka, considering different production levels and has identified the determining factors of their technical efficiency. The study is based on the data collected from the major tomato-producing regions of Karnataka, viz. Kolar and Bangalore rural districts of Karnataka, under three-production situations, viz. small, medium and large farms. Data Envelopment analysis (DEA) and log linear regression models have been used for estimating the technical efficiency and its determining factors, respectively. The study has indicated that most of the farms irrespective of size of holding have shown technical inefficiency problems. The medium farmers have been observed with best measures of technical efficiency, which has been explained by factors such as the land and labour productivity and education. Though medium farmers have been found efficient, with higher yields, it is the small farmers who have emerged as price-efficient producers in terms of lower cost on production (Rs 1.72/kg compared to Rs 2.01 in medium farms and Rs 1.85 in large farms) and higher unit profit. Most of the farms have been observed to have potential to expand production and productivity, increasing technical efficiency as majority have been performing with increasing returns to scale.

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