LUWGLand Use Working Group
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Therefore, the efficiency scores of different groups of wheat growers in our analysis were defined as 1 - exp{(- ui|ei)} and considered as a dependent variable while estimating inefficiency effects models (LUWG, LCWG and full sample).
Maximum likelihood estimates of production frontier: The results indicate that, the coefficients of operating land variables for both LUWG and LCWG were 0.023 and 0.076 respectively (See table 3).
The variables of seed rate showed highest input effect on production and the estimated elasticities were 0.500 for LUWG and 0.369 for LCWG.
Range of technical efficiency: The results in table 4 indicate that, technical efficiency varies widely among sample farm households as mean technical efficiency for LUWG was 89.8 percent and for LCWG was 80.7 percent.The difference in average technical efficiency of both LUWG and LCWG was 9.10 percent, which indicates a significant efficiency gap.
The estimated parameters indicate thatage of the household head (as an indicative of farming experience) had significant but negative effect on LUWG. The negativesignshows that, older farmers in the surveyed areas were technically less efficient compared to their younger counterparts.
The coefficients of certified seed for both LUWG and LCWG were positive and significant, suggesting a positive effecton wheat yield.
The production and dissemination of latest knowledge is essential to validate the efficiency at farm level and to make the agriculture sector multifunctional (Labarthe, 2009).In our analyses, the coefficients of extension services for both LUWG and LCWG were significant and positive, suggesting satisfactory performance of Punjab's agriculture extension department.
However, in rural Pakistan diversified source of income is generally limited because ofcredit constraints,geographic characteristics and lack of technical expertise (Reardon et al., 2000).In our analyses,the coefficients of off-farm income for both LUWG and LCWG groups were significant and positivewhich indicate that those farm households who had diversified source of income other than crop production were technically more efficient.These findings are similar to the study of Tipi et al.
The variable distance to lenderswas significant for LCWG, while non-significant for LUWG. DeYounget al.