Najeebullah Totakhiel

Abstract

 

There is a large variation in wheat production due to the variation of technical efficiency among the Afghan rural wheat farmers. These variations can be attributed to some exogenous and endogenous explanatory variables. This empirical study measures and analyzes technical efficiency in the theoretical framework of stochastic production frontier approach. The parameters of the stochastic frontier production function and the determinants of the technical inefficiency model were estimated simultaneously, through the single stage maximum likelihood estimation procedure, by using the computer program FRONTIER version 4.1. The estimated value of Gamma (γ) ,0.913, significant at 1% level, implies that on average 91.3% of total variation in wheat output is due to technical inefficiency. The mean technical efficiency is about 64% with a range between 6% and 93%, which indicates that on average the wheat farmers obtain 64% of their potential output, and the average loss in wheat production due to the technical inefficiency is 36%, which varies between 7% and 94%. This wide variation in technical efficiency can be interpreted that there still exist opportunities to increase 36% of wheat production at the existing level of inputs and current technology by operating at technically fully efficient level.

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