Resource Use Efficiency in Sugarcane Production in Bihar (India): A Stochastic Frontier Analysis

Abstract

India is the second largest producer of sugar after Brazil accounts for 16 percent of world production. In Bihar, Sugarcane was cultivated in about 2.64 lakh hectare (5.02% of India’s sugarcane area) with a production of 181.76 lakh tonnes and shares 4.17% of total production of the country during 2015-16. Bihar was once reckoned as second largest sugar producing state but it has lost its traditional position to peninsular states. The study is based on plot level data of Comprehensive Cost of Cultivation Scheme, Ministry of Agriculture and Farmers Welfare, Government of India running in Bihar for the period 2013-14. The objectives of the study were to determine technical efficiency of the cultivators in using resource inputs and to access the impact of socio-economic factors on sugarcane production in the state. The resource inputs were found inelastic and not being properly utilized. All the resource inputs were found significant at 1% and 5% level of probability except machine labour and fertilizers used. In inefficiency model landholding size, age and family size were estimated negative, indicating positive impact on efficiency in sugarcane production. The effect of education was accessed positive indicating increase in formal education raised inefficiency. The mean technical efficiency was estimated to be 0.92 indicted that optimal and sustainable use of resource inputs may raise further, the sugarcane production by 8% and boost up the income of the sugarcane growers of the state.