Technical Efficiency of Sugarcane Farms: An Econometric Analysis

Inefficiency in sugarcane production is one of the major factors hindering the exploitation of full potential of the improved technologies. The present study had estimated the technical efficiency of sugarcane farms in three different agro-climatic regions of Tamil Nadu, a constituent state of India, which has the highest cane productivity. The study was conducted on the basis of survey data collected from a random sample of 198 farm households during 2011-2013. A stochastic frontier production function was applied to ascertain the technical efficiency of individual farms and Garrett's ranking technique was used for constraint analysis. The mean technical efficiency of sugarcane production was found to be 88, 80, 78 and 82 % in Western, Cauvery Delta, North-East Zones and pooled data as a whole, respectively. In the Cauvery Delta and North-Eastern Zones, the technical efficiency has indicated that sugarcane yield could be improved up to 20 and 23 % respectively, through better crop management practices. Our analysis also revealed that if the constraints such as non-availability of farm labourers, high wage rate, water scarcity, high price cost of fertilisers and low cane price are overcome, the technical efficiency of sugarcane farms is likely to be increased. Finally, the paper suggests suitable measures to improve the overall efficiency of the sugarcane farms to sustain sugarcane productivity.