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Technical Efficiency for Tea Smallholder Farmers under UTZ Certification System in Sri Lanka: A Stochastic Frontier Approach

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  • Suranjan Priyanath, Hunuwala Malawarage
  • Premaratne, S.P.
  • Yoosuf, Amina
  • Maurice, D.

Abstract

The study aimed to identify the determinants of the technical efficiency of Smallholder Tea Farmers (STFs) under UTZ certification system in Sri Lanka by employing stochastic production frontier using a sample survey of 75 STFs supported by the UTZ programme conducted between January and March in 2016. The results showed that a small number of STFs (11.8 percent) were over 90 percent efficient and the level of efficiency was found to be negatively related to coefficients of UTZ certified STFs and positively related to number of years with the same plants. The results further showed the labor and fertilizer were the significant factors that determine the tea production of STFs.

Suggested Citation

  • Suranjan Priyanath, Hunuwala Malawarage & Premaratne, S.P. & Yoosuf, Amina & Maurice, D., 2018. "Technical Efficiency for Tea Smallholder Farmers under UTZ Certification System in Sri Lanka: A Stochastic Frontier Approach," MPRA Paper 89683, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:89683
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    References listed on IDEAS

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    1. Fried, Harold O. & Lovell, C. A. Knox & Schmidt, Shelton S. (ed.), 2008. "The Measurement of Productive Efficiency and Productivity Growth," OUP Catalogue, Oxford University Press, number 9780195183528.
    2. N.G. Malinga & M.B. Masuku & M.O. Raufu, 2015. "Comparative Analysis of Technical Efficiencies of Smallholder Vegetable Farmers with and Without Credit Access in Swazil and the Case of the Hhohho Region," International Journal of Sustainable Agricultural Research, Conscientia Beam, vol. 2(4), pages 133-145.
    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.
    4. Kumbhakar, Subal C & Ghosh, Soumendra & McGuckin, J Thomas, 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 279-286, July.
    5. Basnayake, B.M.J.K. & Gunaratne, L.H.P., 2002. "Estimation of Technical Efficiency and It's Determinants in the Tea Small Holding Sector in the Mid Country Wet Zone of Sri Lanka," Sri Lankan Journal of Agricultural Economics, Sri Lanka Agricultural Economics Association (SAEA), vol. 4, pages 1-15.
    6. N.G Malinga & M.B Masuku & M.O Raufu, 2015. "Comparative Analysis of Technical Efficiencies of Smallholder Vegetable Farmers with and Without Credit Access in Swazil and the Case of the Hhohho Region," International Journal of Sustainable Agricultural Research, Conscientia Beam, vol. 2(4), pages 133-145.
    7. K. Kalirajan, 1981. "The Economic Efficiency of Farmers Growing High-Yielding, Irrigated Rice in India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(3), pages 566-570.
    8. 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.
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    Cited by:

    1. Nguyen Hung Anh & Wolfgang Bokelmann & Do Thi Nga & Nguyen Van Minh, 2019. "Toward Sustainability or Efficiency: The Case of Smallholder Coffee Farmers in Vietnam," Economies, MDPI, vol. 7(3), pages 1-25, July.
    2. Rangalal Mohapatra & Bondona Lama, 2024. "An analysis of the determinants of productivity of Assam tea growers," SN Business & Economics, Springer, vol. 4(12), pages 1-33, December.

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    More about this item

    Keywords

    Smallholder Tea Farmers; Stochastic Production Frontier; Technical Efficiency; UTZ Certification.;
    All these keywords.

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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