Development of Production Function on Major Food Crops of Sindh Province of Pakistan.

Abstract

Production function is the most important medium of applied economic research especially in the field of agricultural economics. Cobb-Douglas frontier production and time series analysis were applied using primary and secondary data, respectively. Technical efficiency of two major crops viz. wheat and rice was also estimated. Depending on the agricultural ecology of Sindh region, selection of three districts of Sindh was made randomly as Badin, Hyderabad and Larkana districts. Further, multi-stage sampling method was employed to collect data from 384 selected farmers, belonging to mentioned regions, through visiting them personally at their fields. Survey results revealed that on an overall basis, cost per acre on production of wheat was about Rs.9, 000/ and the same was distributed under different heads viz. tractor (Rs. 2,117), seed (Rs. 2,045), DAP (Rs. 2,858), Urea (Rs.2, 076), and pesticide (Rs.418). As per the computed values per acre production and income, wheat grains and wheat chaff were found to have the same production value of 33.5 md/acre respectively. However, wheat grains and wheat chaff were having different sale price values as: Rs.921 per md and Rs. 150 per md respectively. On an overall basis, production of one acre was Rs. 35,901. However, a large disparity in production and income was found out for all districts relating with this study. Hyderabad district was found to have highest production and incomes value where an average production was found 51.6 mds/acre. The lowest production was found for district Larkana where an average production was found 24.1 mds/acre. Overall, the benefit cost ratio was found at 2.95. Additionally, Hyderabad district accumulated better benefit-cost ratio, which was 4.06, then Badin which was at 2.11. It was observed that Hyderabad had better technical efficiency in terms of performance of farms. It was found out that 28% farms in Hyderabad showed technical efficiency within 50-60% range. Larkana district showed 2% technical efficiency. However, no farm in Badin showed technical efficiency within the ranges mentioned for Hyderabad and Larkana districts. For rice crop, input costs under different heads were calculated to be Rs. 10,473/acre. Most significant head of cost was recorded for DAP (Rs. 3,124) followed by urea (Rs. 2,667), tractor (Rs. 2,498), seed (Rs. 2,184) and pesticides (Rs. 688). The average yield of rice crop was about 51.6 md/acre and revenue generated was recorded as Rs.31, 320/acre with average price of Rs. 825/ maund. Input-output ratio was 3.78 while benefit-cost ratio was 2.78. Almost the same technical efficiency of Larkna and Badin districts were observed. Estimates for Cobb-Douglas production function for wheat and rice revealed that additional input cost of DAP was non-significant (p>0.05) with additional revenue generated from wheat and rice crops which may be attributed to higher price of DAP since the same does not have parity with prices of crops under study. In fact, DAP increased yield but additional spending of rupee on DAP did not brought significant revenue for wheat and rice farms. While using secondary data of last forty years of wheat and rice area, production and yield through moving average and exponential smoothing trend revealed that area was almost stagnant while production increased due to yield which may be attributed to adoption of technology with special reference of new varieties of wheat and rice.