Measuring the technical efficiency of the cotton production: The Stochastic Frontier Production Function Approach

The present study was conducted to measure the technical efficiency of the cotton farms in Punjab using the parametric technique of stochastic frontier production function during the agricultural year 2010?11. The results revealed that the variance parameters, s2 and g for the three categories of farms were significantly different from zero and having positive coefficients and statistically significant. This provides statistical confirmation that there were differences in the technical efficiency among farmers. For small, medium and large farms, the value of g was estimated to be 0.88, 0.98 and 0.87, respectively which indicated that the most of the total variation in cotton cultivation from the observed (actual) and frontier (potential) were attributed to technical efficiency and not chance alone. Thus, the shortfall of realised productivity from the frontier was largely due to technical inefficiency and was mainly within the control of individual farmers.