Farm-specific profit inefficiency among Basmati rice producers was estimated from a variable-coefficient profit frontier. The mean level of inefficiency at farm resources and price levels was 28%, with a wide range (5%-87%). Average loss of profit was Rs 1,222 per hectare. Socioeconomic factors related to profit loss were the farm household's education, nonagricultural employment, and a credit constraint. Institutional determinants of profit loss were a water constraint and the late application offertilizer. Punjab-wide benefits of increasing farmer's profit efficiency are large; a 25% reduction in profit loss among Basmati rice producers may generate over Rs 240 million in extra profits each rice season.
This article attempts to determine the long-term productivity and sustainability of irrigated agriculture in the Indian and Pakistan Punjabs by measuring trends in total factor productivity for production systems in both states since the advent of the Green Revolution. These measurements over time and across systems have resulted in three major findings. First, there were wide spatial and temporal variations between the two Punjabs. Although output growth and crop yields were much higher in the Indian Punjab, productivity growth was higher by only a small margin. Moreover, the lowest growth in productivity took place during the initial Green Revolution period (as opposed to the later intensification and post-Green Revolution periods) and in the wheat-rice system in both states. The time lag between adoption of Green Revolution technologies and realization of productivity gains is related to learninginduced efficiency gains, better utilization of capital investments over time, and problems with the standard methods of productivity measurement that downwardly bias estimates, particularly during the Green Revolution period. Second, input growth accounted for most of the output growth in both Punjabs during the period under study. Third, intensification, especially in the wheat-rice system, resulted in resource degradation in both Punjabs. Data from Pakistan show that resource degradation reduced overall productivity growth from technical change and from education and infrastructure investment by one-third. These findings imply the need for policies that promote agricultural productivity and sustainability through public investments in education, roads, and research and extension; and that reduce resource degradation by decreasing or eliminating subsidies that encourage intensification of inputs. The Indo-Gangetic Plain of northern India and Pakistan has one of the largest concentrations of poor people in the world. The agricultural sector, which employs more than half the area's 500 million inhabitants, has long been considered key to food
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