Agris on-line Papers in Economics and Informatics

Faculty of Economics and Management CULS Prague, Kamýcká 129, 165 00 Praha - Suchdol

The international peer-reviewed scientific journal, ISSN 1804-1930


Reform Raises Efficiency of Tea Estates in India

S. Maity

DOI: 10.7160/aol.2017.090209

Agris on-line Papers in Economics and Informatics, No 2 /2017, June

Maity, S. (2017) “Reform Raises Ef ciency of Tea Estates in India", AGRIS on-line Papers in Economics and Informatics, Vol. 9, No. 2, pp. 101 - 116. ISSN 1804-1930. DOI 10.7160/aol.2017.090209.

Abstract

This study compares the performance of the tea industry of Assam and West Bengal of India between two time stretches each spanning over six years; one ending in 2006-07 - the pre-reform regime - and the other beginning in the next year- the post-reform regime. The basic question addressed is whether reform policy led to improvement in technical ef ciency of the tea industries of these states. The study uses stochastic frontier approach and introduces heterogeneity of tea gardens. Consideration of both Assam and West Bengal tea gardens adds unique avour to this study. The study the study concludes that rehabilitation package of Indian government in the form of reform has paid off even within the existing framework of the tea gardens.

JEL Classi cation: C01, Q17, Q19

Keywords

Stochastic Production Frontier, Technical Ef ciency, Tea Gardens, Panel Data, Farm-heterogeneity.

References

  1. Aigner, D., Lovell, C. A. K. and Schmidt, P. (1977) "Formulation and Estimation of Stochastic Frontier Production Function Models", Journal of Econometrics, Vol. 6, pp. 21-37. ISSN 0304-4076. DOI 10.1016/0304-4076(77)90052-5.
  2. Ariyawardana, A. (2003) "Sources of competitive advantage and rm performance: The case of Sri-Lankan value-added tea producers", Asia Paci c Journal of Management, Vol. 20, pp. 73-90. E- ISSN 1572-9958, ISSN 0217-4561. DOI 10.1023/A:1022068513210.
  3. Banerjee, G. D. and Banerji, S. (2008B) "Tea Industry: A Road Map Ahead". Abhijeet Publication, Delhi. ISBN 8189886479.
  4. Basnayake, B. M. J. K. and Gunaratne, L. H. P. (2002) "Estimation of Technical Ef ciency and It's Determinants in the Tea Small Holding Sector in the Mid Country Wet Zone of Sri Lanka”, Sri Lankan Journal of Agricultural Economics, Vol. 4, No. 1, pp. 137-150. ISSN 1391-7358. DOI 10.4038/sjae.v4i0.3488.
  5. Baten, A., Kamil, A. A. and Haque, M. A. (2009) "Modelling technical inef ciencies effects in a stochastic frontier production function for panel data", African Journal of Agricultural Research, Vol. 4, No. 12, pp. 1374-1382. ISSN 1991-637X.
  6. Baten, A., Kamil, A. A. and Haque, M. A. (2010) "Productive efficiency of tea industry: A stochastic frontier approach", African Journal of Biotechnology, Vol. 9, No. 25, pp. 3808-3816. ISSN 1684-5315.
  7. Battese, G. E. and Coelli, T. J. (1988) "Prediction of Firm-Level Technical Ef ciencies with a Generalised Frontier Production Function and Panel Data", Journal of Econometrics, Vol. 38, pp. 387-399. ISSN 0304-4076.
  8. Battese, G. E. and Coelli, T. J. (1992) "Frontier Production Function, Technical Ef ciency and Panel Data: With Application to Paddy Farmers in India", The Journal of Productivity Analysis, Vol. 3, pp. 153-169. E-ISSN 1573-0441, ISSN 0895-562X. DOI 10.1007/BF00158774.
  9. Battese, G. E. and Coelli, T. J. (1995) "A Model for Technical Inef ciency Effects in a Stochastic Frontier Production Function for Panel Data", Empirical Economics, Vol. 20, pp. 325-332. E-ISSN 1435-8921, ISSN 0377-7332. DOI 10.1007/BF01205442.
  10. Bhattacharjee, D. and Sharma, M. J. (2016) "Economic Analysis of Indian Tea Industry Using Non-parametric Model Data Envelopment Analysis", International Journal of Science Technology and Management, Vol. 5, No. 1, pp. 410-419. E-ISSN 2394-1537, ISSN 2394-1529.
  11. Bruno, M. (1978) "Duality, Intermediate Inputs and Value Added", In Fuss, M. and McFadden, D. (Ed.), Production Economics: A Dual Approach to Theory and Applications, Vol. 2, North Holland Publishing Co. Amsterdam. ISBN 9780444850126.
  12. Coelli, T., Rao, D. S. and Battese, G. E. (1998) "An Introduction to Ef ciency and Productivity Analysis", Kluwer Academic Publishers, London. E-ISBN 978-0-387-25895-9, ISBN 978-0-387-24265-1.
  13. Coelli, T. J. (1996) "A Guide to FRONTIER Version 4.1: A Computer Programme for Stochastic Frontier production and Cost Function Estimation", CEPA Working Papers. University of North England. ISSN 1327-435X, ISBN 1863894950.
  14. Dutta, M. and Neogi, C. (2013) "Reform Raises Ef ciency of Oil Re ning Public Sector Enterprises in India", Indian Economic Review, Vol. XLVIII, No. 2, pp. 239-262. ISSN 0019-4670.
  15. Farrell, M. J. (1957) "The Measurement of Productive Ef ciency", Journal of the Royal Statistical Society, Vol. 120, No. III, pp. 253-281. E- ISSN 1467-9868.
  16. Ferrier, G. D. and Lovell, K. (1990) "Measuring Cost Ef ciency in Banking – Econometric and Linear Programming Evidence", Journal of Econometrics, Vol. 46, pp. 229–245. ISSN 0304-4076.
  17. Fried, H. O., Lovell, C. A. K. and Schmidt, S. S. (2008) "Ef ciency and Productivity". [Online]. Available: http://pages.stern.nyu.edu/~wgreene/FrontierModeling/SurveyPapers/Lovell-Fried- Schmidt.pdf. [Accessed 11 Jan 2016].
  18. Government of India (2012) "Outcome Budget 2010-2011", Department of Commerce, Ministry of Commerce & Industry, pp. 1-128.
  19. Greene, W. (2005) "Reconsidering heterogeneity in panel data estimators of the stochastic frontier model", Journal of Econometrics, Vol. 126, pp. 269–303. ISSN 0304-4076.
  20. Hazarika, C. and Subramanian, S. R. (1999) "Estimation of technical ef ciency in the stochastic frontier model - An application to the tea industry in Assam", Indian Journal of Agricultural Economics, Vol. 54, No. 2, pp. 201-210. ISSN 00195014.
  21. ITC Annual Bulletin Supplement (2012) and MSS March (2013) [Online]. Available: http://www.teaboard.gov.in/pdf/Global_Tea.pdf.[Accessed 12 Oct 2015].
  22. Jayasinghe, J. M. J. K. and Toyoda, T. (2004) "Technical ef ciency of organic tea smallholdings sector in Sri-Lanka: a stochastic frontier analysis", International Journal of Agricultural Resources, Governance and Ecology, Vol. 3, pp. 252–265. E-ISSN 1741-5004, ISSN 1462-4605. DOI 10.1504/IJARGE.2004.006039.
  23. Kalirajan, K. P. (1981) "The Economic Ef ciency of Farmers Growing High Yielding Irrigated Rice in India", American Journal of Agricultural Economics, Vol. 63, pp. 566-570. E-ISSN 1467-8276, ISSN 0002-9092.
  24. Kumbhakar, S. C. and Lovell, C. A. K. (2000) "Stochastic Frontier Analysis", Cambridge University Press, Cambridge, 1-232. ISBN 10 0521481848.
  25. Kumbhakar, S. C., Ghosh, S. and McGuckin, J. T. (1991) "A Generalized Production Frontier Approach for Estimating Determinants of Inef ciency in U.S. Dairy Farms", Journal of Business & Economic Statistics, Vol. 9, No. 3, pp. 287-296. E-ISSN 1537-2707, ISSN 0735-0015.
  26. Mahesh, N., Ajjan, N. and Raveendran, N. (2002) "Measurement of technical ef ciency in Indian tea industry", Journal of Plantation Crops, Vol. 30, No. 2. ISSN 0304-5242.
  27. Maity, S. (2011) "A Study of Measurement of Ef ciency". VDM Verlag Dr. Müller GmbH & Co. KG, Germany. ISBN-978-3-639-33741-9.
  28. Maity, S. (2012) "Farm size and economic ef ciency: a case study of tea production in West Bengal", International Journal of Sustainable Economy, Vol. 4, No. 1, pp. 53-70. E-ISSN 1756-5812, ISSN print: 1756-5804. DOI 10.1504/IJSE.2012.043995.
  29. Maity, S. and Neogi, C. (2014) "Production of Tea in Assam and West Bengal: Technical Inef ciency Effects", Artha Vijnana, Vol. LVI, No. 4, pp. 479-499. ISSN 0971-586X.
  30. Our Bureau (2004) "IBA approves tea package", The Economic Times. February 12, 2004, Kolkata, 2.
  31. PTI (2007) "Government package helps tea gardens reopen", The Economic Times. Sep 16, 2007, New Delhi, 3.
  32. Schmidt, P., and Lovel, C. A. K. (1979) "Estimating Technical and Allocative Inef ciency Relative to Stochastic Production and Cost Functions", Journal of Economics, Vol, 9, No. Feb, pp. 343-366. ISSN 0304-4076.
  33. Stevenson, R. E. (1980) "Likelihood Functions for Generalized Stochastic Frontier Estimation", Journal of Econometrics, Vol. 13, pp. 57-66. ISSN 0304-4076.

Full paper

icon of PDF documents Full paper (.pdf, 1.27 MB).

ISSN 1804-1930
© Agris on-line Papers in Economics and Informatics, 2009 - 2017
Faculty of Economics and Management CULS Prague, Kamycka 129, 165 00 Praha 6 - Suchdol