Abstract
Jute production plays a major part in the economy
of Bangladesh by supporting over 25 million people employed in
cultivation and processing, which contributes considerably to
export revenues. While earlier studies have concentrated on either
technical or economic efficiency separately, the present study
contributes to the field by jointly estimating technical, allocative,
and economic efficiencies applying a two-stage DEA-Tobit
technique to estimate the efficiency of jute production. A sample
size of 360 from the district Faridpur, which is nationally known
for high-quality jute production that makes it a critical focus
point, has been chosen as the area of the present study. The paper
also suggests that its results may serve as benchmarks that apply
to comparable agroecological zones in South Asia. On average,
technical, allocative, and economic efficiencies of the farms were
found to be 0.87, 0.93, and 0.82, respectively, whereas their present
inefficiencies are 12.4%, 17.7%, and 6.3%. Although TE and AE
are 87.6% and 93.7% respectively, farmers are inefficient in
obtaining the optimum level of output. Therefore, farmers may
produce a specified amount of output at the lowest feasible cost by
decreasing the cost of jute production by 17.7%, given the
available resources. Moreover, a second-stage Tobit regression
employed in the present study has demonstrated that farm-specific
factors such as age, family size, education level, farming
experience, land size, kind of seed, and the profession of the head
of the household, etc. all have a substantial influence on the
efficiency of the farms. These findings along with the second-stage
Tobit regression that links efficiency to farm-specific factors, give
empirical insights for targeted agricultural policy and rural
poverty reduction, therefore attracting the educated young to
choose agriculture as a career option. The research thereby fills a
vacuum in multi-dimensional efficiency studies and facilitates
both regional and international development policies.
