Assessing the technical efficiency and Returns-to-scale of wheat growers: data development analysis application

It is possible to determine the Technical Efficiency (TE) and Returns-to-Scaie (RTS) of farmers on a farm by using the production function (frontier). Two methods can be employed for establishing the production function frontier, parametric and non-parametric method. In this papers attempt has been made to use non-parametric method i.e. Data Envelopment Analysis (DEA) for assessing the efficiency and RTS of wheat growers. It was found that farmers in zone 2 with source-wise technical efficiency of 0.94 withdraw energy efficiently followed by zones 3 and 4 (0.93 each), zone 5 (0.89) and zone 1 (0.83). Source-wise scale efficiency (SE) showed that the 3% energy was lost in zone 2, 4% in zone 3 and 4, 6% in zone 5 and 11% in zone 1. Results depicted that Pearson's correlation coefficient (r) between parametric and non-parametric technical efficiency was 0.84 and 0.86 for operation-wise and source-wise energy input, respectively. DEA decomposed the technical efficiency into pure technical efficiency (PTE) and scale efficiency and could provide precise condition for inefficiency resources as compared with parametric method. Also the Banker, Charnes, Cooper (BCC) model of the DEA cleared variable condition of return-to scale (RTS) for efficient and inefficient farmers whilst parametric method did not represent such condition. Variable return-to-scale signify the redistribution of the sources among the inefficient farmers. It was observed that inefficient farmers followed increasing return-to-scale with 61.5% and 89.5% share for operation-wise and source-wise, respectively followed by 24.5% and 5.3% constant return-to-scale correspondingly.