Resource use efficiency of mechanized and traditional rice farms in Nepal: A comparative analysis

Abstract

This paper has compared the resource use efficiency in rice production among mechanized and traditional farmers in Tarai districts (Jhapa, Sunsari and Bardiya) of Nepal in 2018/19. Data were collected from 494 farmers (274 mechanized and 220 traditional) using multistage random sampling. Production function analysis (Cob-Douglas production function) was used to obtain the marginal value productivity of inputs and to examine the resource use efficiency in crop production in mechanized and traditional rice farms. Study showed that machinery cost was highest and significant to the total income from rice in mechanized rice farm, whereas fertilizer cost accounted the highest in traditional rice farm. Increase in human labor was found to decrease the income from crop in mechanized rice farm. Effect of manures, fertilizers and bio and chemical pesticides was positive and significant in both type of farms. The effect of irrigation cost was significant in mechanized farm and it was non-significant for traditional farm. There was decreasing returns to scale in all the farms. Production resources in the study area were found not to be efficiently utilized to optimum economic advantage for both mechanized and traditional rice farmers, respectively. Return to scale was found to be 0.695 and 0.488 for mechanized and traditional rice farm which revealed that inputs used in rice production were ineffectively utilized in which manures, chemical fertilizers, machineries, bio- and chemical pesticides and irrigation resource were under used and human labor, seed and animal labor over used. This situation of underutilization of these resources should be overcome by increasing farmers' access to these inputs and encouraging them to use in higher quantity to realize higher return. Assurance of quality and timely supply of fertilizers, plant protection materials and investment on irrigation infrastructure should be done by government authority to increase in efficiency of resources used by farmers. Moreover, technology packages for adequate and timely application of these inputs should be delivered to the farmers to maximize returns through increased resource use efficiency. Relevant policies should be formulated to encourage the creation of alterative employment opportunities to absorb the excess labor used in rice production. Based on the result obtained it can be concluded that mechanized rice production is more efficient in resource utilization and subsequently more profitable than traditional farming.