Analyses of Technical Efficiency Using SDF and DEA Models: Evidence from Nepalese Agriculture

International audienceAlleviation of poverty is a central issue in Nepal. Given the limited stock of land, and the infant/unorganised manufacturing sector, increased demand for food has to be satisfied by improving production efficiency. This paper examines how this could be achieved. SDF and DEA models identify the existence of a high degree of technical inefficiency in Nepalese agriculture, suggesting that there is a substantial prospect of increasing agricultural productivity using the existing level of inputs and resources more efficiently. Among the three farm sizes in the data set, medium size farmers achieve a higher technical efficiency than large and small farm sizes, suggesting that productive efficiency can be increased with the encouragement of creating medium size holdings. The technical inefficiency model suggests the potential for shifting the production frontier upwards by providing ownership of land, increasing farmers' education and knowledge, and increasing land quality, including irrigation facilities