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Profit Efficiency Among Basmati Rice Producers in Pakistan Punjab

Mubarik Ali and John C. Flinn

American Journal of Agricultural Economics, 1989, vol. 71, issue 2, 303-310

Abstract: Farm-specific profit inefficiency among Basmati rice producers was estimated from a variable-coefficient profit frontier. The mean level of inefficiency at farm resources and price levels was 28%, with a wide range (5%–87%). Average loss of profit was Rs 1,222 per hectare. Socioeconomic factors related to profit loss were the farm household's education, nonagricultural employment, and a credit constraint. Institutional determinants of profit loss were a water constraint and the late application of fertilizer. Punjab-wide benefits of increasing farmer's profit efficiency are large; a 25% reduction in profit loss among Basmati rice producers may generate over Rs 240 million in extra profits each rice season.

Date: 1989
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