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Cost efficiency estimates of maize production in Nepal: a case study of the Chitwan district

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  • P. Paudel

    (The United Graduate School of Agricultural Sciences, Ehime University, Ehime, Japan)

  • A. Matsuoka

    (Faculty of Agriculture, Ehime University, Ehime, Japan)

Abstract

This study was carried out to analyze the cost efficiency of maize production in the Chitwan district, Nepal with a view to predict economic efficiencies using stochastic frontier cost function. The primary data were collected from 180 maize farmers representing 12 village development committees (VDCs) including one municipality of the district during May-June 2005 for the cropping year 2004-2005. Among various factors, use of manure accounted the highest share in the production cost followed by labour and tractor costs. The maximum-likelihood (ML) estimates of the parameters revealed that estimated coefficients of cost of tractor, animal power, labour, fertilizer, manure, seed and maize output gave positive coefficients and were significant at 5% level. Further, quantitative estimates obtained from the cost function shows the mean cost efficiency of 1.634 indicating that an average maize farms from the study incurred about 63% costs above the frontier cost-an indication of inefficiency. Also, the significant years of schooling of the household head and maize area in the inefficiency model indicated the positive effect of these factors on cost efficiency of the farms. From the analysis of scale effect among maize farms, it was revealed that the maize farms experienced an increasing return to scale, that is, the output increased more proportionately than the total production cost.

Suggested Citation

  • P. Paudel & A. Matsuoka, 2009. "Cost efficiency estimates of maize production in Nepal: a case study of the Chitwan district," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 55(3), pages 139-148.
    • Handle: RePEc:caa:jnlage:v:55:y:2009:i:3:id:1002-agricecon
    DOI: 10.17221/1002-AGRICECON
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    References listed on IDEAS

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    1. Paudyal, Kamal R. & Ransom, Joel K. & Rajbhandari, Neeranjan P. & Adhikari, Krishna Prasad & Gerpacio, Roberta V. & Pingali, Prabhu L., 2001. "Maize in Nepal: Production Systems, Constraints, and Priorities for Research," Maize Production Systems Papers 7652, CIMMYT: International Maize and Wheat Improvement Center.
    2. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    3. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
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    1. Josef Pulkrábek & Miroslav Kavka & Vladimír Rataj & Jaroslav Humpál & Ladislav Nozdrovický & Zdeněk Trávníček & Vladimír Pačuta, 2012. "The assessment of the economic risks level of sugar beet growing for the farm economy," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 58(1), pages 41-48.
    2. Guha, Pradyut & Mandal, Raju, 2021. "Technical Inefficiency of Maize Farming and Its Determinants in Different Agro-Climatic Regions of Sikkim, India," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 0(Number 2), June.
    3. Ilemobayo, Olufunke Olufunmilayo & Rahji, Mohammed Abdul Yekeen & Oluwafemi, Zacchaeus Olaniyi & Johnson, Sina Basil, 2024. "A Time Series Analysis of Output-Oriented Production Efficiency in Nigeria Agriculture," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 12(01), January.

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