DefinePK

Abstract

This research evaluates economic efficiency of maize growers of in southern Khyber Pakhtunkhwa province, Pakistan. Districts Dera Ismail Khan (DI Khan) and Bannu. A multi-stage random sampling procedure was employed for selection of 100 maize farmers, fifty respondents from district DI Khan and fifty from district Bannu. Cross-sectional primary data was gathered from sampled respondents through a well-structured and pre-tested interview schedule. Cobb-Douglas type stochastic production function and stochastic frontier cost function were estimated by using Maximum Likelihood Estimation (MLE) techniques through Stata 17 software. Production inputs such as land, labor, seed, tractor hours, irrigation numbers, urea, DAP, farmyard manure (FYM), and pesticides were included in the production model. Socio-economic characteristics such as age, farming experience, education, family size, tenure status, off-farm income and farm-to-home distance were considered as explanatory variables in inefficiency effect model. Additionally, production risk variables i.e., average maximum temperature, average minimum temperature, and average rainfall were included to evaluate their impact on technical efficiency of farmers. Results showed that the average yield and net return per acre were 824 kg and Rs. 26,898, respectively in district DI Khan whereas 736 kg and Rs. 22,166 per acre were recorded in district Bannu. The coefficients of the estimated production function indicated that seed rate, labor days, urea, DAP, farmyard manure (FYM), and pesticides have statistically significant effect on maize production. In contrast, the effects of cultivated area, tractor hours, and number of irrigations were statistically insignificant. This can be attributed to the lack of substantial variation in these particular inputs among the sampled farmers, due to hilly area cultivation of maize were carried on terracing with minimum utilization of tractor/farm machinery. The mean technical efficiency was estimated to be 0.81. This suggests maize farmers could improve yields by up to 19% using existing input levels. Among the climatic risk factors, average maximum temperature showed a significant negative relationship with technical inefficiency, suggesting improved efficiency with higher temperatures up to a point. Average minimum temperature had a positive and significant relationship with inefficiency, while rainfall showed a negative but statistically insignificant effect. Mean allocative efficiency was estimated for District DI khan  was 0.57, indicating that production costs could be reduced by 10% per acre. Similarly, the average allocative for District Bannu was estimated 0.60, indicating that production cost could be reduced by 24%.  Economic efficiency was relatively low (0.32 average), with no farmer achieving full efficiency. To enhance economic efficiency, key focus areas including strengthening formal and informal education, promoting coordination and cooperation among stakeholders (farmers, agricultural research and extension services, and input dealers), and implementing fair and consistent output pricing policies. Due to variation in terms of relationship within efficiency and farmers socioeconomic factors among districts, need based policies are essential to guide farmers for advancement in maize production.