Institutional credit and farm technical efficiency: Evidence from a field experiment using stochastic frontier analysis
By: Bhat, Showkat Ahmad Paltasingh, Kirtti Ranjan Mir, Ab Hamid and Hamid, Ishfaq
.
Material type: 
BookPublisher: International Journal of Rural Management Description: 22(1), Apr, 2026: p.115-135.Subject(s): Technical efficiency, stochastic frontier analysis, Agricultural credit, Tobit regression
In:
International Journal of Rural ManagementSummary: This study examines the impact of access to formal credit on the technical efficiency of farms. The stochastic frontier analysis (SFA) is used to estimate technical efficiency by utilising primary survey data collected through a multi-stage random sampling technique. The results reveal that technical efficiency scores range from 0.56 to 0.97. There is a relatively high level of technical efficiency among borrower households (score 0.88) compared to non-borrower households (score 0.67), which implies that credit access enables farmers to use better technologies and optimise input use. The major inputs, such as labour, chemicals, machinery and farm size, are positively associated with farm technical efficiency, whereas land tenancy, seed price and fertilisers tend to decrease farm efficiency. The gamma coefficient (0.76) justifies the application of SFA, implying that inefficiency in the farm inputs is more likely than random shocks. In addition, the age of the household head, farming experience, education, occupation, membership, farm size, household assets and access to credit are the primary factors determining efficiency. These findings highlighted the requirement to have policy interventions in order to improve the socio-economic environment, institutional support, access to credit and managerial skills of farmers, which would increase productivity and achieve sustainable agricultural development.- Reproduced
https://journals.sagepub.com/doi/full/10.1177/09730052261423707?_gl=1*aqeh6a*_up*MQ..*_ga*MTIwOTEwMjg3
NS4xNzgzNTg5MjE2*_ga_60R758KFDG*czE3ODM1ODkyMTUkbzEkZzEkdDE3ODM1ODkyNjMkajEyJGwxJGg1OTk5NjEwOTg.
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
Articles
|
Indian Institute of Public Administration | 22(1), Apr, 2026: p.115-135 | Available | AR139332 |
This study examines the impact of access to formal credit on the technical efficiency of farms. The stochastic frontier analysis (SFA) is used to estimate technical efficiency by utilising primary survey data collected through a multi-stage random sampling technique. The results reveal that technical efficiency scores range from 0.56 to 0.97. There is a relatively high level of technical efficiency among borrower households (score 0.88) compared to non-borrower households (score 0.67), which implies that credit access enables farmers to use better technologies and optimise input use. The major inputs, such as labour, chemicals, machinery and farm size, are positively associated with farm technical efficiency, whereas land tenancy, seed price and fertilisers tend to decrease farm efficiency. The gamma coefficient (0.76) justifies the application of SFA, implying that inefficiency in the farm inputs is more likely than random shocks. In addition, the age of the household head, farming experience, education, occupation, membership, farm size, household assets and access to credit are the primary factors determining efficiency. These findings highlighted the requirement to have policy interventions in order to improve the socio-economic environment, institutional support, access to credit and managerial skills of farmers, which would increase productivity and achieve sustainable agricultural development.- Reproduced
https://journals.sagepub.com/doi/full/10.1177/09730052261423707?_gl=1*aqeh6a*_up*MQ..*_ga*MTIwOTEwMjg3
NS4xNzgzNTg5MjE2*_ga_60R758KFDG*czE3ODM1ODkyMTUkbzEkZzEkdDE3ODM1ODkyNjMkajEyJGwxJGg1OTk5NjEwOTg.
There are no comments for this item.