Purpose The purpose of this paper is to investigate the impact of financial inclusion on the enhancement of paddy farmers’ technical efficiency (TE). The impact was evaluated rigorously from different dimensions which could be useful in the policy discussion for enhancing efficiency in utilizing productive resources. Design/methodology/approach A cross-sectional data of randomly selected 120 paddy farmers from Khulna district in the Southwest region of Bangladesh were collected for this study. Initially, a stochastic production frontier approach was used for estimating farmers’ TE. Thereafter, ordinary least squares and quantile regression models were applied for unveiling the existing relationship between TE and various dimensions of financial inclusion after controlling all other socio-economic characteristics. Findings The study findings revealed that farmers were around 86 percent technically efficient and amongst them, credit takers were more efficient than non-credit takers. A non-monotonic relationship between TE and amount of credit was observed where TE was maximized at amount around 20,000 Bangladeshi Taka (USD255), a medium credit in terms of its amount. In addition, credit literacy was identified as a significant factor for improving TE. Though difference in the choice of sources for accessing credit had little impact on mean TE, its effect was found significantly higher for low scored technically efficient farmers compared to high scored farmers. Practical implications The policy toward widening the coverage of financial inclusion would be more effective than providing larger amount of credit to a limited number of farmers for improving their TE. Originality/value Such an in-depth assessment of the impact of financial inclusion on TE is probably the first effort in the Khulna district of Bangladesh.

A study was conducted to analyze the dairy farming sector of Bangladesh from an economic viewpoint. Primary data was collected from smallholder dairy farms using survey questionnaires. A Cobb-Douglas production function and multiple regression models were estimated to analyze farm milk productivity and gross margin of the dairy farms. Surveyed dairy farms owned on an average 3.07 milking cows comprising 0.37 indigenous and 2.70 crossbred cows. Average milk productivity was 7.80 liter per cow per day, in which indigenous cow milk productivity was 1.9 1iter per day and crossbred cow milk productivity was 6.48 liter per cow per day. The study found that average daily milk production of small, medium, and large dairy farms were 5.45, 32.50, and 59.83 liter, respectively. Average monthly revenue and cost of milk production were US$ 79 and US$ 21 per cow, resulting in the average net return of US$ 58 per cow per month. Both quantitative estimation and t test results indicated a positive and statistically significant relationship between farm size and milk productivity and gross margin. The study findings also indicate that crossbred cows are providing higher economic benefits to the dairy farmers compared to the indigenous breeds. Despite being smallholder and subsistence, dairy farming shows potential for increasing returns to scale, and hence, there is a scope for further growth of the sector.

This paper uses the stochastic frontier approach to measure technical efficiency level of the agricultural farms of Khulna, Bangladesh. It considers three sub-sectors: rice cultivation, fish cultivation and livestock rearing. About 76%, 81%, and 73% variations in output are due to technical inefficiency for the farms of the three sub-sectors, respectively. The highest variation in output (due to inefficiency) is found in the fish cultivation sub-sector. The sample farms are operating at an inefficient level and the inefficiency level decreases over time for the sub-sectors. The farming experience of the farmers and the availability of the credits significantly and positively affect the efficiency level of the farms. This study finds the necessity of redefining and redesigning the credit instrument for maintaining sustainability in the long run. It is also found that all the three sub-sectors have a chance to increase their production level with the same set of technology.

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Purpose The purpose of this paper is to investigate the relationship between poverty and technical efficiency (TE) of paddy farmers in presence of their heterogeneous selling behaviours. This paper explains how such behavioural heterogeneity affects this relationship in south-western Bangladesh. Design/methodology/approach Translog production frontier model was used to estimate TE since it fitted the data set better. On the other hand, poverty indices were constructed by using P-α method. Then, multinomial logit models examined the existence of heterogeneous selling behaviours. It revealed adequate evidences in favour of behavioural heterogeneity. Finally, the authors employed a series of two stage instrumental variable regression models to relate poverty and TE with and without considering the behavioural heterogeneity. Findings The study finds that around 18, 39 and 44 per cent of households exhibit autarkic, non-wholesaling and wholesaling behaviour, respectively. Market failure due to transaction cost and credit constraints leads to emergence of such heterogeneity. Across these heterogeneous behaviours, impact of improving TE on poverty status significantly differs. Without controlling behavioural heterogeneity, TE significantly improves the poverty status of the rural farm households. However, scenario is changed after controlling this heterogeneity. After behavioural segregations, TE improves poverty status only for wholesalers. In contrary to prior expectation, it worsens the poverty situation for both autarkic and non-wholesaling households. Simultaneous failure in both credit and product market for these households might be the plausible reason behind this heterodox finding. Credit market failure compels these households to borrow from local money lenders with costlier terms. This effort might improve their TE. But, product market failure makes their additional production due to improved TE unsold. Thus, repayment of credit directly reduces their consumption expenditure. Therefore, an effort to improve TE might increase prevalence and depth of poverty when market failure exists. Henceforth, the improvement of TE appears as an effective policy instrument only when households exhibit wholesaling behaviour. Originality/value The earlier studies show the relationship between TE and poverty status but did not account behavioural heterogeneity. The authors attempt to overcome this shortcoming and show how market failure induced behavioural heterogeneity affects the effectiveness of TE on improving poverty status of farm households.