An Analysis of Technical Efficiency for Household’s Rice Production in Cambodia: A Case Study of Three Districts in Battambang Province

Abstract

The aims of this study are to measure the technical efficiency (TE) of Cambodian household’s rice production and trying to determine its main influencing factors using the stochastic frontier production function. The study utilized primary data collected from 301 rice farmers in three selected districts of Battambang by structured questionnaires. The empirical results indicated the level of household rice output varied according to differences in the efficiency of production processes. The mean TE is 0.34 which means that famers produce 34% of rice at best practice at the current level of production inputs and technology, indicates that rice output has the potential of being increased further by 66% at the same level of inputs if farmers had been technically efficient. Furthermore, between 2013-2015 TE of household’s rice production recorded -14.3% decline rate due to highly affected of drought during dry season of 2015. Moreover, evidence reveals that land, fertilizer, and pesticide are the major influencing input factors of household’s rice production, while disaster, education of household head, family size and other crops’ cultivated area are core influencing factors decreasing TE. Conversely, the main influencing factors increasing TE are irrigated area, number of plot area and sex of household head.

Estimating Factors Affecting Technical Efficiency in Indian Manufacturing Sector

“…Stochastic frontier production function approach (SFPFA) and data envelopment analysis (DEA) are the two main techniques which can be used to estimate the technical efficiency (TE) of firms/industries and other sectors of the economy (Aigner, Lovell & Schmidt, 1977;Meeusen & Van den Broeck, 1977;Chavas & Aliber, 1993;Kumbhakar & Lovell, 2003;Rajesh, 2007;Faruq & Yi, 2010;Akpan et al, 2012;Pattnayak & Chadha, 2013;Kumar & Arora, 2012;Hamjah, 2014;Zhou, 2014;Mahajan, Nauriyal & Singh, 2014;Debnath & Sabastian, 2014;Bhatia & Mahendru, 2015;Munisamy, Fon & Khin, 2015;Sahu, 2015;Ng'ombe & Kalinda, 2015;Narwal & Pathneja, 2015;Ikram, Su & Sadiq, 2016); Okoye et al, 2016;Kea, Li & Pich, 2016;Vu, 2016;Fahmy-Abdullah et al, 2017;Gebresilassie, & Nyatanga, 2017;Singh, Narayanan & Sharma, 2018;Singh, Narayanan & Sharma, 2019). Efficiency is defined as the best allocation of resources to achieve the highest level of output (Bhatia & Mahendru, 2015).…”

“…Technical efficiency (TE) measures the ability of producers in manufacturing firms to produce the maximum amounts of output using available inputs and technologies (Kea, Li & Pich, 2016). TE is also useful to estimate allocative, production, and economic efficiency of manufacturing firms (Rajesh, 2007;Bhatia & Mahendru, 2015;Kea, Li & Pich, 2016;Fahmy-Abdullah et al, 2017;Singh, Narayanan & Sharma, 2018). Economic efficiency is achieved if the highest possible level of satisfaction is obtained from given resources in a manufacturing firm (Ikram, Su & Sadiq, 2016).…”

“…Economic efficiency is achieved if the highest possible level of satisfaction is obtained from given resources in a manufacturing firm (Ikram, Su & Sadiq, 2016). Production efficiency is concerned with the relative performance of the process that is used to transformation of input(s) into output(s) in manufacturing firms (Kea, Li & Pich, 2016). Allocative efficiency measures the ability of a firm/producer to produce a high quantity of output using the minimum cost of inputs in a manufacturing firm (Rajesh, 2007;Hamjah, 2014).…”

“…In a production unit, efficiency measures the level of process which produces the maximum quantity of output using the lowest quantity of inputs (Kea, Li & Pich, 2016;Singh, Narayanan & Sharma, 2019). In general, efficiency is associated with inputs (e.g., labor, capital, land, finance, managerial skills, technologies, etc.)…”

“…which use to produce goods and services in manufacturing firms. The value of TE lies between 0 -1 (Bhatia & Mahendru, 2015;Kea, Li & Pich, 2016;Sen & Das, 2016;Ikram, Su & Sadiq, 2016); Fahmy-Abdullah et al, 2017). In India, limited studies estimate the TE of firms in manufacturing sectors using SFPFA.…”