Levels of Technical, Allocative, and Groundwater Use Efficiency and the Factors Affecting the Allocative Efficiency of Wheat Farmers in Pakistan

Sobia Asghar, Nophea Sasaki, Damien Jourdain and Takuji Tsusaka
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Nophea Sasaki: School of Environment, Resources and Development, Asian Institute of Technology, P.O. Box 4, Khlong Luang, Pathumthani 12120, Thailand
Damien Jourdain: School of Environment, Resources and Development, Asian Institute of Technology, P.O. Box 4, Khlong Luang, Pathumthani 12120, Thailand

Sustainability, 2018, vol. 10, issue 5, 1-22

Abstract: In Pakistan, excessive lowering of the groundwater table has made crop irrigation costlier and without improving production efficiency, Pakistan’s rural economy will be adversely affected. This study estimated the technical, allocative, and groundwater use efficiency of wheat producers, identified the factors affecting their allocative efficiency, and suggested policy implications from these results. The data were collected from 84 tubewell owners, 65 tubewell shareholders, and 75 water buyers. The technical, allocative, and groundwater use efficiency were estimated by the Data Envelopment Analysis (DEA) method, and the important factors affecting the allocative efficiency were identified by two-limit tobit regression analysis. The results highlighted that the tubewell owners, tubewell shareholders, and water buyers had above 90% technical and groundwater use efficiency. However, allocative efficiency was substantially lower for all groups, indicating that wheat production costs could be significantly reduced by the optimal allocation of inputs. The allocative efficiency of wheat farmers decreased significantly with the increasing capacity of the tubewells, with the sharing of tubewells, and with the use of tractor-operated tubewells. The results imply that wheat farmers should be provided with technical and decision-making support to select an appropriate tubewell system that minimises their cost of production and improves their allocative efficiency. Furthermore, the resource allocation system of tubewell shareholders should be further studied to improve the allocative efficiency of wheat farmers.

Keywords: Data Envelopment Analysis (DEA); groundwater markets; water buyers; tubewell shareholders; tubewell owners; two-limit tobit regression; electric tubewells; tractor-operated tubewells (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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