Determinants of Inefficiency in Vegetable Farms: Implications for Improving Rural Household Income in Nepal

Abstract

Improving household income is a critical issue for rural sustainable economic development in the world, particularly in developing countries. Enhancing the productive efficiency of vegetable farms help to increase farmers’ income and that contribute to reduce rural poverty. This paper evaluates the productive efficiency and identifies the determinants of inefficiency in vegetable farms adopting stochastic translog production function using survey data. The results reveal that the vegetable farms are inefficient and have substantial potential to improve the efficiency levels with greater access to agricultural markets, higher levels of farmers’ education, and increased number of trainings to the farmers. In addition, women empowerment in vegetable farming with incentive packages consisting of agricultural support services and superior technologies would improve productivity and efficiency in vegetable production that increase household income of the farmers.