Efficiency and economics in cotton production of Bangladesh

Jaba Rani Sarker, Ferdous Alam


Bangladesh is one of the most prominent and promising garments producing and exporting country in the world. At present it uses approximately 6 million bales cotton for its textile and garments industry. But cotton production is much lower than the volume required in the textile and garments industries. The inadequate production of cotton results in poor backward linkage to the ever-flourishing garments sector coupled with high import bill payment. The present study was conducted to determine the technical, allocative, and cost efficiencies of cotton farmers in Bangladesh. Data envelopment analysis was used to determine efficiencies while tobit regression was applied to determine factors affecting efficiencies. Mean CRS TE was 83.6% while VRS TE was estimated at 89.1%. Allocative, cost and scale efficiencies were 78.1%, 69.7% and 93.9% respectively. Seventy five percent cotton farms exhibited increasing returns to scale while only 10 percent and 14 percent displayed evidence of decreasing and constant returns to scale. Experience, number of working adult person, access to credit, extension service and size of cotton cultivated land were the significant factors determining technical efficiencies.

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DOI: http://dx.doi.org/10.12895/jaeid.2016110.494