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The influence of share tenancy contracts on the cost efficiency of rice production during the Bangladeshi wet season

Mohammad Islam () and Seiichi Fukui ()
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Mohammad Islam: Graduate School of Agriculture, Kyoto University
Seiichi Fukui: Graduate School of Agriculture, Kyoto University

Economics Bulletin, 2018, vol. 38, issue 4, 2431-2443

Abstract: This study investigated how crop-share tenancy affects the efficiency of rice production during the wet season in Bangladesh. In doing so, we estimated a stochastic frontier cost function to assess cost inefficiency, and test the hypothesis that share tenancy has a negative effect on cost efficiency of rice production. Through applying the “maximum likelihood-based methodology, the endogeneity problem in stochastic frontier model,†was properly handled, which is the substantial contribution of the present study. This study also contributes not only toward determining the inefficiency of share tenancy contracts during the wet season for rice, also to the development of controversial debates on the efficiency of share tenancy in Bangladesh. The analysis implied that if the land tenure system is other than crop-share tenancy, cost efficiency of wet season rice production could be improved by 19 percent. This surprising result suggests that a policy to induce a tenurial system other than crop-share tenancy in changing tenancy practices would produce comparative advantage of rice production during the wet season in Bangladesh.

Keywords: share tenancy; cost efficiency; land-tenure system (search for similar items in EconPapers)
JEL-codes: Q1 C2 (search for similar items in EconPapers)
Date: 2018-12-27
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