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- Economic efficiency of rainfed rice production in Kayin State, Myanmar
Economic efficiency of rainfed rice production in Kayin State, Myanmar
Thesis Abstract:
The rice sector in Myanmar is predominantly for local consumption, maintaining national food security, and uplifting the rural economy. The objectives of this study were to calculate the gross margin, examine the economic efficiency, and determine the factors affecting efficiency of rice production in Kayin State.
Data from a total sample of 400 rice farm households were collected using random sampling technique from two main growing areas in Kayin State. Results indicated that majority of the farmers averaged 51 years old, had an average of four years of schooling, and treated agriculture as a part time job. Farm experiences in paddy production were on average 22 years and average households’ family size was six members. Family labor involved in farming was only two members and 86.5 percent grew paddy on their own fields. In the study area, three kinds of paddy varieties were planted—17.75 percent used traditional varieties, 60.25 percent used high-yielding varieties, and 22 percent used new improved seeds.
Of the total sample, 25 percent of farmers had access to extension services while 15.25 percent obtained farm loans from credit institutions. With regard to fertilizer applications, 3.25 percent of samples applied fertilizer frequently. Average farm size was 3.01 ha and the observed average output was 2,205.72 kg/ha. Production cost was USD 376.47/ha and total revenue was USD 485.26/ha; therefore, the mean value of gross margin was USD 108.79/ha.
Empirical results of efficiency analysis revealed that the mean pure technical
efficiency, allocative efficiency, economics efficiency, overall technical efficiency, and scale efficiency were 80.9, 66.8, 54.4, 50.6, and 62.7 percent, respectively. About 2.25 percent of samples achieved the highest efficiency level under constant returns to scale, 97 percent operated under increasing returns to scale, while 0.75 percent operated under decreasing returns to scale.
Efficiency analysis results showed that 38 DMUs (9.5%) were the technically best practiced farm while seven DMUs (1.75%) were the allocatively and economically best practiced farms, thus they all were the benchmarks for other producers. The benefits from potential efficiency improvement revealed that total production cost savings would be about USD 68.91/ha at fully pure technical efficiency, USD 125/ ha at fully allocative efficiency, and USD 167.90/ha at fully economic efficiency. Therefore, the value of gross margin would increase to USD 177.70/ha at fully pure technical efficiency, USD 233.79/ha at fully allocative efficiency, and USD 276.69/ ha at fully economic efficiency. Major determinants on efficiency scores were age of farmers, educational level, family size, access to extension services, farm size,
frequency of fertilizer application, and new improved seeds (seeds replacement). Thus, policies leading to improving farmers’ informal education level and provision of workshops and training programs are very important to sustain farm output. This will enhance the achievement of farms’ economic goals and increase farm efficiency in the area.
