Whether crop diversification is energy efficient: An empirical analysis from Bangladesh

Abstract

This study examines whether crop diversification provides economy in energy use and improves technical energy efficiency using a large survey data of 2,075 farms from 20 subdistricts of 17 districts in Bangladesh by applying a stochastic input-distance function approach. The results reveal that cereal production significantly increases energy use by 0.14% for every one percent increase` in output. Renewable source of energy constitutes 59.6% of total inputs and labour energy alone constitutes 39%. Significant output complementarity exists between cereal and oilseed enterprises but competition exist between jute with pulse and/or oilseed enterprises. The mean technical energy efficiency is estimated at 68% implying that energy output can be increased by 32% by eliminating inefficiency.Diversification amongst enterprises is associated with energy inefficiency, implying that specialization into cereals improves efficiency. Large farms are inefficient whereas large family size improves efficiency. The key policy implication is that diversification of crop enterprises must maintain cereal (i.e., rice/wheat/maize) as the main base and then add noncereal crops (e.g., oilseeds) in order to improve energy economy. Also, diversification within cereals from rice monoculture to wheat and/or maize will significantly improve technical energy efficiency. JEL classification: O33; Q18; C21

Total Factor Energy Productivity and Efficiency Changes of the Gher (Prawn-Carp-Rice) Farming System in Bangladesh: A Stochastic Input Distance Function Approach

“…For example, energy intensity in the agricultural sector in Bangladesh has increased from 1.78 in 2000 to 11.31 in 2008 [5], thereby adding substantial pressure on the existing acute shortage of energy in the economy [6]. Rahman and Kazal [7] noted that energy use increases by 0.14% for every one percent increase in cereal output, at the farm level in Bangladesh. The government of Bangladesh has been trying to enhance other sources of food production since 1990s, which can generate high income for farmers and export earnings for the economy, e.g., fisheries and aquaculture.…”

“…The analytical framework include: (a) computing basic partial measures of energy performance, such as, energy productivity, energy use efficiency and net energy balance [6,7,35]; and (b) an application of the stochastic input-distance function approach to identify drivers of energy productivity and efficiency as well as to compute indices of TFEP, TC and EEC.…”

“…Common partial measures of energy input and output were computed for each enterprise of the gher farming system for each year to examine movement in these measures over time. These are: [6,7,35,36]…”

“…Since data contains a very detailed breakdown of all outputs and inputs of each enterprise of the gher farming system, we were able to conduct an ex-post analysis of the system by using standard energy coefficients from published literature to convert all physical inputs and outputs into energy units [6,7,35,37]. For some inputs and outputs, whose energy equivalents are not commonly available, we have calculated those values using the methods utilized by Rahman and Barmon [6].…”

“…The second-order elasticities provide information on the production complementarities, which reflect economic impacts arising from output jointness. That is if the output relationships are complementary, than an increase in one output increases the contribution of other outputs, therefore, enhancing performance of the system (for details of derivations of these measures from the distance function, please see [6,7,41,43].…”