Technical Efficiency of Dryland and Irrigated Wheat Based on Stochastic Model

The technical efficiency and factors affecting efficiency of wheat farmers under dryland and irrigated conditions in the Jammu district of J &K state have been reported for the year 2006. The stochastic frontier production function has been used to determine the technical efficiency of these farmers. Technical efficiency has been found different under both the conditions. The estimated mean technical efficiency of wheat farmers under dry condition has been found to be 0.84, indicating 84 per cent efficiency in their use of production inputs, and for irrigated condition it has been found to be 0.88, that means the average output of wheat could be increased by 12 per cent by adopting technology properly. The value of γ under dry and irrigated conditions has indicated that about 99 per cent and 88 per cent of the differences between the observed and the maximum production frontier outputs are due to the factors, which are under farmers’ control. The estimated value of λ under dry and irrigated conditions are significantly different from zero, indicating a good fit and the correctness of the distributional assumptions specified. The value of λ has been more than one, implying the dominance of one-sided component Ui in Ei and thus indicated high degree of technical inefficiency. In other words, the inefficiency component was not dominated by the random factors. The variance ratio γ has showed that the farm-specific variability contributed more to the variation in yield, which means that variation in output from frontier is attributed to technical inefficiency. Some of the factors found to influence the level of technical efficiency are higher level of education in irrigated condition and larger number of male workers under dry conditions