Analysis of Technical Efficiency of Litchi (Litchi chinensis) Production in Bangladesh: A Stochastic Frontier Analysis

Abstract

AbstractAgriculture plays a crucial role in Bangladesh’s economy by providing employment, alleviating poverty,
enhancing food security, and supplying inputs for industrial production. While crops and cereals
dominate the agricultural sector, fruits, including litchi, play a significant role in Bangladesh
agriculture. However, it is found that litchi growers in Bangladesh are not fully efficient in optimizing
their inputs, highlighting the need for interventions and improvements in the sector. Thus, the
objective of the present study is to estimate the technical efficiency of litchi production in Bangladesh.
Required data are collected from 100 litchi producing farmers of Ishwardi Upazilla selected by using
multistage random sampling procedure. In analyzing the data, farm specific technical efficiency scores
are estimated using the Cobb- Doughlas Stochastic Frontier Production function approach. The study
found that the mean technical efficiency of the litchi producer is about 84.20% that means there have
still 15.80% room for increasing technical efficiency of the litchi producer. Again, by using farm specific
technical inefficiency as dependent variable multiple regression is performed for understanding the
factors’ that affect technical inefficiency. According to the result it is found that in case of litchi
production training, education and loan has significant impact for enhancing technical efficiency.