Effects of partial quantity rationing of credit on technical efficiency of Boro rice growers in Bangladesh: Application of the stochastic frontier model

Md Ghulam Rabbany; Yasir Mehmood; Fazlul Hoque; Tanwne Sarker; Arshad Ahmad Khan; Kh Zulfikar Hossain; Mohammad Shakhawat Hossain; Rana Roy; Jianchao Luo

doi:10.9755/ejfa.2021.v33.i6.2714

Authors

Md Ghulam Rabbany College of Economics and Management, Northwest A&F University, Yangling Shaanxi 712100, China Department of Agribusiness and Marketing, Faculty of Agribusiness Management, Sher-e-Bangla Agricultural University, Sher-e-Bangla Nagar, Dhaka 1207, Bangladesh
Yasir Mehmood 3Department of Social and Behavioral Sciences, National University of Medical Science, Rawalpindi, Pakistan
Fazlul Hoque 2Department of Agribusiness and Marketing, Faculty of Agribusiness Management, Sher-e-Bangla Agricultural University, Sher-e-Bangla Nagar, Dhaka 1207, Bangladesh
Tanwne Sarker School of Economics and Finance, Xi’an Jiaotong University, China
Arshad Ahmad Khan College of Economics and Management, Northwest A&F University, Yangling Shaanxi 712100, China
Kh Zulfikar Hossain Department of Agricultural Extension and Information System, Faculty of Agriculture, Sher-e-Bangla Agricultural University, Sher-e-Bangla Nagar, Dhaka 1207, Bangladesh
Mohammad Shakhawat Hossain College of Economics and Management, Northwest A&F University, Yangling Shaanxi 712100, China World Vision Bangladesh, BleNGS Project, Jamalpur 2000, Bangladesh
Rana Roy Department of Agroforestry and Environmental Science, Sylhet Agricultural University, Sylhet, Bangladesh
Jianchao Luo 1College of Economics and Management, Northwest A&F University, Yangling Shaanxi 712100, China

DOI:

https://doi.org/10.9755/ejfa.2021.v33.i6.2714

Abstract

In this study, we analyzed the effects of the partial quantity rationing of credit on the technical efficiency of Boro rice growers in the Pabna district of Bangladesh. Before conducting the field survey, we designed a theoretical framework and identified farm households affected by the partial quantity rationing of credit. Data were collected from 174 Boro rice growers and analyzed in two stages, where the technical efficiency of Boro rice growers was assessed using stochastic frontier analysis, and the inefficiency effects model was then applied to evaluate determinants of the technical efficiency. The mean technical efficiency of Boro rice growers was 78%, which indicates that their technical efficiency was 22% beyond the production frontier curve. The variables comprising the household head’s age, education level, seed quality, formal training, access to the market, farm labor, tillage cost, fertilizer cost, irrigation cost, and price of seedlings significantly affected the technical efficiency of rice growers. The variables of interest comprising the rate and partial quantity rationing of credit had significant negative effects on the technical efficiency of rice growers. The findings obtained in this study will help to enhance the actual production level using the available resources and improve the food security situation in Bangladesh.

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