Tracing the impact of market reform on productivity growth of rice at the farm level in Bangladesh

Abstract

The paper measures the total factor productivity (TFP), technical change (TC) and technical efficiency change (TEC) in rice production, and traces the impact of market reform policies of the 1990s on these indices at the farm level in Bangladesh using a unique cohort of three-period panel data (1987, 2000 and 2004) of 73 farms by applying stochastic production frontier approach. Results reveal that the TFP index has increased by 27% largely due to an upward shift of the technology frontier. Although TC has increased by an impressive 57%, TEC declined by 30.1% during the post-reform period, thereby depressing overall TFP growth. The market liberalization policies exerted significantly positive impacts on TC and TFP growth but negatively on TEC. Farm size and household size also significantly improved these indices while education, tenancy and off-farm income exerted negative effects. Policy implications include continued liberalization of markets and land reform measures to increase farm size.

Keywords:

• TFP growth
• technical efficiency change
• technical change
• market reform policies
• farm level
• Bangladesh

JEL codes:

• D24
• Q18
• Q12

Additional information

Notes on contributors

Mohammad Jahangir Alam

Mohammad Jahangir Alam is associate professor in the Department of Agribusiness and Marketing at Bangladesh Agricultural University, Bangladesh. He holds a PhD from Ghent University, Belgium. He was visiting scholar at the Department of Agricultural Economics and Agribusiness at the University of Arkansas, USA and visiting professor at Dublin Institute of Technology, Ireland. His research interests include agricultural policy, commodity and energy markets etc.

Ismat Ara Begum

Ismat Ara Begum is associate professor in the Department of Agricultural Economics at Bangladesh Agricultural University, Bangladesh. She holds a PhD and an MSc in agricultural development economics from Hokkaido University, Japan. She has worked as a visiting professor at Ghent University and at KaHo, Belgium. Her research interests include agricultural policy, agricultural development economics, livestock policy, etc.

Sanzidur Rahman

Sanzidur Rahman is associate professor at the School of Geography, Earth and Environmental Sciences at the University of Plymouth, UK. He holds a PhD and an MSc from AIT and Chiang Mai University, respectively, in Thailand. He has worked for IFPRI, Reading University, Manchester University, etc. His research interests include efficiency and productivity measurement, underlying areas of technical change, etc.

Jeroen Buysse

Jeroen Buysse is professor in the Department of Agricultural Economics at Ghent University, Belgium. He holds a PhD in agricultural economics from Ghent University, Belgium. His research interests include agricultural policy, trade policy, agro-environmental schemes, etc.

Guido Van Huylenbroeck

Guido Van Huylenbroeck is professor in the Department of Agricultural Economics at Ghent University, Belgium. He holds a PhD in agricultural economics from Ghent University, Belgium. His research interests include productivity and efficiency analysis, agricultural and market policy, etc.