Measurement of Allocative and Technical Efficiency in Using Inputs on Paddy Farming in Golakharka, Ilam

Abstract

Agricultural sector has got the highest priority in each development plan in Nepal. But no significant progress in agricultural productivity has been realized. This paper analyses the production factors that affect production and farming, technical efficiency, and input utilization allocation in paddy farming at Golakharka, Ilam, by using linear regression from the Cobb-Douglas production function. This study is mainly based on primary data. Simple random sampling was used to collect primary data. All necessary input-output data was collected in physical units of measurement like Muri, Pathi, Mana firsthand with the help of a pre-developed questionnaire. Then these were converted into standard units. The population of the study was 1224 households who reside in these selected words from the population, 10 percent (122) from the household area surveyed for this study. The result of this study showed that the regression coefficients of the estimated production function of the first group in cases of local seeds, manure, animal labour, and labour are significant at 1% level and the coefficient is less than unity which indicates that the marginal productivity of inputs decreasing. It means farmers have low allocative efficiency in using agricultural inputs. Similarly, the regression coefficients of the estimated production function of the second group in the case of seeds HYV, manure, are significant at 5 % level of significance. The production elasticity of human labour was found insignificant. The value of R and F is very low in the 1st group and higher in the 2ndgroup. The value of R and F are 0.49 and 3.002 in the first and 0.94 and 19.730 in the second group respectively. Concerned authorities are recommended to increase the allocative and technical efficiency of farmers. External inputs should be provided in the needy time of crop season with sufficient quantity. Training and visit programs should be made effective for the diffusion of external inputs. The credit facility should be provided to the farmers in an appropriate quantity without any delay. Moreover, farmers should apply more external inputs to some extent than the present level.