Technical Efficiency, Determinants and Risks of Watermelon Production in Bangladesh

Abstract

The present study is conducted to examine the technical efficiency, identify factors causing inefficiency and assess farmer’s perception on major sources of risk in producing watermelon in Bangladesh. In this purpose, a sample of 180 farmers has been selected by multistage stratified sampling technique from Patuakhali district due to the production intensity of watermelon coverage among various districts of Bangladesh. Data on farm-specific characteristics, output, input prices and costs during the production period of December, 2015 to April, 2016 have been collected from watermelon producers. A stochastic frontier production function model is used to analyze the technical efficiency of the farmers growing watermelon. Results obtained by fitting the model reveal that mean technical efficiency level is 86% indicating a scope for increasing average efficiency by 14%.Natural calamity is the highest source of risk in watermelon production. The output elasticity corresponding to the significant (p<0.05) coefficients of the inputs viz., human labour, amount of fertilizer used, irrigation cost and pesticide cost are 0.04, 2.99, 22.74 and 19.25, respectively. Technical inefficiency of the watermelon producer is reduced significantly (p<0.05) as the farm size increases. Access to both training and microcredit exert a significant (p<0.01) reduction in technical inefficiency of the farmers who produce watermelon. So, government and non-government organizations may take initiatives to improve watermelon productivity by providing training, and micro credit facility with low rate of interest to the farmers.