IDEAS home Printed from https://ideas.repec.org/a/rnd/arjsds/v10y2020i4p1-11.html
   My bibliography  Save this article

An Estimation of Technical Efficiency of Tea Smallholdings in Ratnapura District of Sri Lanka

Author

Listed:
  • Sandunika Jayakody
  • Sajitha Dishanka

Abstract

While accepting the fact that the tea smallholdings sector of Sri Lanka immensely contribute to the annual tea output of the economy, the sector still faces various deficiencies due to problems pertaining to input related issues. Measuring the level of efficiency and identifying the factors which are attributed to inefficiency are in utmost importance in introducing remedies for that. A cross sectional survey was conducted on a sample of tea smallholders in Ratnapura district where highest contribution to the total tea production of the country is made. In this study, the Cobb-Douglas Stochastic production frontier model was used by incorporating the technical inefficiency effect model to estimate the level of technical efficiency in tea smallholdings sector. The study revealed that average technical efficiency of tea smallholdings sector in the study area was 87.36 percent that keeps a margin of 12.64 percent for further improvements through better use of available resources and technology. The results of the Cobb-Douglas model revealed that the estimated coefficients of land, labor and fertilizer are positively and significantly affect the green leaves production of the sector. The findings of the inefficiency model disclosed that age, farming experience, level of education, occupation, age of tea plants, farming group membership and credit access have significant negative impact on technical inefficiency

Suggested Citation

  • Sandunika Jayakody & Sajitha Dishanka, 2020. "An Estimation of Technical Efficiency of Tea Smallholdings in Ratnapura District of Sri Lanka," Journal of Social and Development Sciences, AMH International, vol. 10(4), pages 1-11.
  • Handle: RePEc:rnd:arjsds:v:10:y:2020:i:4:p:1-11
    DOI: 10.22610/jsds.v10i4(S).2839
    as

    Download full text from publisher

    File URL: https://ojs.amhinternational.com/index.php/jsds/article/view/2839/1946
    Download Restriction: no

    File URL: https://ojs.amhinternational.com/index.php/jsds/article/view/2839
    Download Restriction: no

    File URL: https://libkey.io/10.22610/jsds.v10i4(S).2839?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Coelli, Tim J., 1995. "Recent Developments In Frontier Modelling And Efficiency Measurement," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 39(3), pages 1-27, December.
    2. Ashok Parikh & Farman Ali & Mir Kalan Shah, 1995. "Measurement of Economic Efficiency in Pakistani Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(3), pages 675-685.
    3. Afriat, Sidney N, 1972. "Efficiency Estimation of Production Function," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(3), pages 568-598, October.
    4. Msuya, Elibariki & Ashimogo, Gasper, 2005. "Estimation of Technical Efficiency in Tanzanian Sugarcane Production: A Case Study of Mtibwa Sugar Estate Outgrowers Scheme," MPRA Paper 3747, University Library of Munich, Germany.
    5. Wadud, Md. Abdul., 2003. "Technical, Allocative, and economic efficiency of farms in Bangladesh: a stochastic frontier and DEA approach," Journal of Developing Areas, Tennessee State University, College of Business, vol. 37(1), pages 109-126, September.
    6. 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.
    7. Phu Nguyen-Van & Nguyen To-The, 2016. "Technical efficiency and agricultural policy: evidence from the tea production in Vietnam," Review of Agricultural, Food and Environmental Studies, Springer, vol. 97(3), pages 173-184, November.
    8. Munir Ahmad & Ghulam Mustafa Chaudhry & Mohammad Iqbal, 2002. "Wheat Productivity, Efficiency, and Sustainability: A Stochastic Production Frontier Analysis," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 41(4), pages 643-663.
    9. Battese, George E. & Corra, Greg S., 1977. "Estimation Of A Production Frontier Model: With Application To The Pastoral Zone Of Eastern Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 21(3), pages 1-11, December.
    10. Battese, George E., 1992. "Frontier production functions and technical efficiency: a survey of empirical applications in agricultural economics," Agricultural Economics, Blackwell, vol. 7(3-4), pages 185-208, October.
    11. 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.
    12. Forsund, Finn R. & Lovell, C. A. Knox & Schmidt, Peter, 1980. "A survey of frontier production functions and of their relationship to efficiency measurement," Journal of Econometrics, Elsevier, vol. 13(1), pages 5-25, May.
    13. George E. Battese & Greg S. Corra, 1977. "Estimation Of A Production Frontier Model: With Application To The Pastoral Zone Of Eastern Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 21(3), pages 169-179, December.
    14. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Coelli, Tim J., 1995. "Recent Developments In Frontier Modelling And Efficiency Measurement," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 39(3), pages 1-27, December.
    2. repec:aer:wpaper:172 is not listed on IDEAS
    3. Asefa, Shumet, 2011. "Analysis of technical efficiency of crop producing smallholder farmers in Tigray,Ethiopia," MPRA Paper 40461, University Library of Munich, Germany, revised 19 Sep 2012.
    4. Madau, Fabio A., 2005. "Technical Efficiency in Organic Farming: An Application on Italian Cereal Farms Using a Parametric Approach," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24545, European Association of Agricultural Economists.
    5. Maria Francesca Cracolici & Peter Nijkamp & Piet Rietveld, 2008. "Assessment of Tourism Competitiveness by Analysing Destination Efficiency," Tourism Economics, , vol. 14(2), pages 325-342, June.
    6. Abdul Wadud, 2013. "Impact of Microcredit on Agricultural Farm Performance and Food Security in Bangladesh," Working Papers 14, Institute of Microfinance (InM).
    7. Martine Audibert, 1997. "Technical Inefficiency Effects Among Paddy Farmers in the Villages of the ‘Office du Niger’, Mali, West Africa," Journal of Productivity Analysis, Springer, vol. 8(4), pages 379-394, November.
    8. Voigt, Peter, 2004. "Russlands Weg vom Plan zum Markt: Sektorale Trends und regionale Spezifika. Eine Analyse der Produktivitäts- und Effizienzentwicklungen in der Transformationsphase," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 28, number 93021, September.
    9. Uvarovsky, Vladimir & Voigt, Peter, 2000. "Russia'S Agriculture: Eight Years In Transition - Convergence Or Divergence Of Regional Efficiency," IAMO Discussion Papers 14891, Institute of Agricultural Development in Transition Economies (IAMO).
    10. Althaler, Karl S. & Slavova, Tatjana, 2000. "DEA Problems under Geometrical or Probability Uncertainties of Sample Data," Economics Series 89, Institute for Advanced Studies.
    11. Zuniga-Gonzalez, C.A, 2009. "Analisis de la eficiencia tecnica de la unidad de VPN UNAN-LEON utilizando funcion de produccion stochastic frontier, 2007-2008 [Technical efficiency analysis of the PNV unit UNAN-Leon using produc," MPRA Paper 110950, University Library of Munich, Germany, revised 14 Jan 2009.
    12. Binam, Joachim Nyemeck & Tonye, Jean & wandji, Njankoua & Nyambi, Gwendoline & Akoa, Mireille, 2004. "Factors affecting the technical efficiency among smallholder farmers in the slash and burn agriculture zone of Cameroon," Food Policy, Elsevier, vol. 29(5), pages 531-545, October.
    13. Blazek, David & Sickles, Robin C., 2010. "The impact of knowledge accumulation and geographical spillovers on productivity and efficiency: The case of U. S. shipbuilding during WWII," Economic Modelling, Elsevier, vol. 27(6), pages 1484-1497, November.
    14. Tom Kompas, 2001. "Catch, Efficiency and Management: A Stochastic Production Frontier Analysis of the Australian Northern Prawn Fishery," International and Development Economics Working Papers idec01-8, International and Development Economics.
    15. Tom Kompas & Tuong Nhu Che & R. Quentin Grafton, 2004. "Technical efficiency effects of input controls: evidence from Australia's banana prawn fishery," Applied Economics, Taylor & Francis Journals, vol. 36(15), pages 1631-1641.
    16. Uvarovsky, Vladimir & Voigt, Peter, 2000. "Russia's agriculture: eight years in transition - convergence or divergence of regional efficiency," IAMO Discussion Papers 31, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
    17. Sickles, Robin C. & Hao, Jiaqi & Shang, Chenjun, 2015. "Panel Data and Productivity Measurement," Working Papers 15-018, Rice University, Department of Economics.
    18. Gauri Khanna, 2006. "Technical Efficiency in Production and Resource Use in Sugar Cane: A Stochastic Frontier Production Function Analysis," IHEID Working Papers 15-2006, Economics Section, The Graduate Institute of International Studies.
    19. Tanira T. Kingi & Tom F. Kompas, 2005. "Communal Land Ownership and Agricultural Development: Overcoming Technical Efficiency Constraints Among Fiji’s Indigenous Sugercane Growers," International and Development Economics Working Papers idec05-11, International and Development Economics.
    20. Hayatullah Ahmadzai, 2017. "Crop Diversification and Technical Efficiency in Afghanistan: Stochastic Frontier Analysis," Discussion Papers 2017-04, University of Nottingham, CREDIT.
    21. Ruben Tansini & Patricia Triunfo, 1998. "Eficiencia técnica y apertura comercial en cuatro ramas industriales," Documentos de Trabajo (working papers) 0998, Department of Economics - dECON.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rnd:arjsds:v:10:y:2020:i:4:p:1-11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Muhammad Tayyab (email available below). General contact details of provider: https://ojs.amhinternational.com/index.php/jsds .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.