Economic Efficiency Analysis. A Case Study of Crops Production in the Rahad Agricultural Corporation

Abstract

This study was carried out in The Rahad Agricultural Scheme. The main objectives of the study are to measure technical efficiency of produced crops, to determine the main factors that caused technical inefficiency, to assess the maximum farm’s income level under optimum cropping patterns and to identify the socio-economic factors that affected the level of efficiency of farmers. The study shed light on the factors that constraint agricultural production as well as yield efficiency in Rahad agricultural scheme. Production and yield have deteriorated and the income of tenants has consequently declined. Moreover the scheme was suffered from its own deficiency of adopting a proper cropping patterns. As a consequence, average yield of the main crops in the scheme since 19977-1978 were decrescent. The study mainly depended on Primary data which were collected from a survey conducted in season 2006/2007, through a multi-stage stratified random sampling technique using structural questionnaire after pre-testing. The study also used secondary data collected from the relevant institutional sources. Descriptive statistics, stochastic production frontier model of the Cobb-Douglas form, gross margins and linear programming were emploed to analyze the collected data. The results of descriptive statistics showed that: 32 % of the tenants interviewed were in the active age group ( 20-50). Most of tenants were 19 married, had formal education. The average of tenant's family size was 9 persons. 36% of the sample tenants were engaged in such off- farm activities.. The majority of the farmers depend on traditional implements. Groundnuts, dura and cotton crop each of them had two peaks period of Labour requirements. Cotton had high cost followed by groundnuts. Sunflower had a higher gross margin followed by groundnuts. Most of the estimated β co-efficient of the SPF model for crops production had the expected signs, and significant. The mean technical efficiency was 70%, 79%, 76% and 71% for groundnuts, dura, cotton and sunflower, respectively. Accordingly there was a scope for increasing crops production in that order, by 30%, 21%, 24% and 29%. The variance ratio parameters γ was large and significant and has a value of 0.99, 0.99, 0.97 and 0.99 forgroundnuts, dura, cotton, and sunflower. Tenancy location, off-farm income, farm income, sowing date, labour number, irrigation number and weeding number,were significant variable for improving technical efficiency. age group, sex, education level, family size and extension contact were significant in explaining technical inefficiency in RAC. 20 The LP results cleared that the real cropping plan was different from the basic model cropping pattern, most of the land was allocated to groundnuts ( 9.66 feddans), followed by sunflower(9.61 feddans), while dura and cotton were entered in the optimal plan with small areas 1.22 , and 1.5 feddans respectively. In the real situation, the crops occupied 5.5 feddan for each . The optimal net farms was (SDG 5799.01) exceeded the actual net farms (SDG 4544.16) by 27.61% . Many scenarios were tried by developing the parameters of the free LP model to reflect a range of production options. The scenarios reflected the effects of productivities, Restricting production area, prices, cost of inputs, more participation of family labour in cotton picking, using machines and improving technology. The study recommended to improve technical efficiency for crops production in the RAC, The main recommendations was concentrated and oriented to sowing date, peak demands for labour, more participation of the family labour, problem of irrigation, extension education, and expanding in promising crops . 21