Growth and efficiency analysis of tobacco production in Bangladesh: a non-parametric approach

Jaber Rana (), M. Kamruzzaman, Shaima Chowdhury Sharna and Sohel Rana
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Jaber Rana: Khulna Agricultural University
M. Kamruzzaman: Bangabandhu Sheikh Mujibur Rahman Agricultural University
Shaima Chowdhury Sharna: Bangabandhu Sheikh Mujibur Rahman Agricultural University
Sohel Rana: Bangabandhu Sheikh Mujibur Rahman Agricultural University

SN Business & Economics, 2021, vol. 1, issue 12, 1-19

Abstract: Abstract The rate of increase of tobacco cultivation in Bangladesh over the past decades is a major concern because of its impact on available land for nutritious crop production. Improved production efficiency through proper input use may meet the domestic demand for tobacco while slowing the rate of increase in land under tobacco cultivation. However, no studies have been conducted on tobacco production efficiency in Bangladesh. Thus, this study aims to find out the farm-level tobacco production efficiency and the factors affecting the production efficiency. Primary data was enumerated from 130 tobacco producers of Meherpur district using simple random sampling technique. Data were analyzed using the data envelopment analysis (DEA) technique to identify efficiency of the production of tobacco, and a Tobit model was used to study the factors that affected production efficiency. The results revealed that the compound growth rate of tobacco production and yield were 1.78% and 1.76% respectively. The efficiency study showed that the technical, allocative, and cost efficiency were 0.85, 0.90, and 0.76, respectively, where the scale efficiency was 0.87. The result indicated that only 13% of farmers were operating at scale-efficient level. The poor result of cost efficiency can be attributed to the overuse of input and an inefficient ratio choice. Mobile use in agriculture and education was found to be a promising factor for increasing the efficiency of tobacco production. The study also reveals that the availability of agricultural input discourages the farmers from tobacco cultivation.

Keywords: Compound growth rate; Efficiency estimate; DEA approach; Tobit regression; Tobacco production; Bangladesh (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s43546-021-00172-4

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