Profit efficiency and influencing factors for the inefficiency of maize production in Bangladesh

Abstract

This study examines the profit efficiency and the responsible factors for inefficiency in 350 hybrid maize growers in selected areas of Bangladesh by using the profit frontier function and inefficiency effects model. A multistage stratified random sampling procedure was used for data collection. This study proves that maize production is profitable. The average net return is 32392 BDT/acre and the benefit-cost ratio was more than 2. Farmers use more organic manure, but less chemical fertilizer than recommended doses. The outcomes also disclosed a profit efficiency score of 0.71, which indicates a 29% profit inefficiency. The average net benefit was 32392.40 BDT/acre and profit-loss 16975.99 BDT/acre. This implies that the enhancement of allocative, technical, and scale efficiencies can reach a potential profit of 49368.39 BDT/acre. This study found that age, educational level, extension experience, and non-farm income were the main factors for profit inefficiency. This study suggests that farming efficiency can be increased remarkably by enhancing the educational status and proper extension services. Furthermore, the necessary steps for promoting an effective system of soil management with good irrigation facilities and increasing agricultural training will improve efficiency.

Keywords

• Profitability
• Efficiency
• Battese and coelli model
• Determinants
• Maize
• Bangladesh