Total Factor Productivity and Sources of Long-Term Growth in the Bhutanese Rice Production

Abstract

Sustainable growth in domestic food production cannot just depend on mobilizing its factor resources but will also require higher productivity growth. This paper aims to study the total factor productivity (TFP) of rice in Bhutan for the period 2009-2010 to 2016-2017. The study employs non-parametric Malmquist index approach to measure TFP growth and decompose into efficiency and technical change. In addition, panel data model is applied to determine the factors influencing changes in TFP growth. The results show that average annual Malmquist productivity growth was only slightly positive, mainly propelled by technological change. The analysis of the factors determining TFP changes suggested that irrigation and population are the key to sustaining long-term rice TFP growth.