Abstract:
Paddy farming is predominantly practiced in the dry zone of Sri Lanka.
Most paddy lands in the dry zone belong to traditional hydrological
cascade systems known as Village Tank Cascade Systems (VTCS) and
paddy lands receive irrigation water from the tanks in VTCS. Land is a
scarce resource for agriculture in Sri Lanka. Therefore, it is important to
achieve high efficiency in paddy farming to increase paddy production
in the country. A paddy farm is technically efficient if it is producing the
maximum output using the minimum quantities of inputs, such as labour,
capital, and technology. This study examines technical efficiency of paddy
farmers in Mahakanumulla VTCS and its determinants. The technical
efficiency of the farmers is estimated using parametric frontier technique;
the Stochastic Frontier Analysis (SFA). In the first stage of the analysis a
production function is estimated using the Maximum Likelihood Estimator.
In the second stage, an inefficacy model is estimated with plot size, age,experience, household size, full time farming, and land ownership status
as determinants of technical inefficiency. According to the results, the
average technical efficiency of paddy farmers in Mahakanumulla VTCS is
92.3%. Only the plot size, experience, and household size are positively
related to technical inefficiency and significant at 10%. According to the
study findings, the technical efficiency of paddy farmers in Mahakanumulla
VTCS does not vary significantly from the most efficient farmer in the area.
This could be due to the fact that in the VTCS, farmers are operating under
more homogenous conditions. However, it does not indicate that paddy
farmers in Mahakanumulla VTCS are highly productive as results only
reveal the technical efficiency level of paddy farmers in comparison to
the most efficient paddy farmer in the area. Therefore, it is important that
productivity improvements are continuously carried out.
