Abstract:
Technical efficiency means the effectiveness which a given set of inputs used to produce a
given output and it helps to produce the maximum output using minimum quantity of inputs
for any firm or farm products. The objectives of this study are to estimate the Hicks –
Moorsteen index and examine the impact of demographic, economic, farming and
environmental characteristics on total factor productive efficiency index. Further, this study
evaluate the overall performance of paddy farmers (n= 200) and identify the factors affecting
the efficiency using two – stage Data Envelopment Analysis (DEA) during 2019/2020 period
in Mullaitivu district of Sri Lanka. Hicks – Moorsteen index showed that among the
components of the index, 94% of the highest mean value was attained in Input Oriented
Technical Efficiency (ITE) followed by 93% of efficiency was attained in Output Oriented
Scale Efficiency (OSE). Tobit regression results suggested that education, availability of
training and destroy the crops whether the crops were damaged by environmental factors were
significantly affecting the Hicks – Moorsteen index. Further, results of two – stage input oriented DEA revealed that on average the overall technical efficiency of paddy farms was
nearly 42%, scale efficiency was nearly 45% and variable returns to scale technical efficiency
was nearly 93%. The Tobit regression results showed that, education, land ownership, amount
of savings, loan size, land quality and farm income were positively impact on overall technical
efficiency while experience, ownership of land, amount of savings and destroy the crops
whether the crops were damaged by environmental factors significantly affected on technical
efficiency. Conversely, scale efficiency of paddy farming mostly influenced by education, land
ownership, saving amount, loan size, quality of land and farm. The paper concludes that both input oriented technical efficiency and output oriented scale efficiency need to be improved
further as well as scale efficiency mostly affected by economic and farming characteristics in
the study.
