Joint determination of the choice of growing season and economic efficiency of maize in Bangladesh

Abstract

The paper jointly evaluates the determinants of the choice of maize growing season (winter vs. summer maize) and economic efficiency of individual producers in Bangladesh using a sample selection framework applied to stochastic frontier models. Model diagnostics reveal that sample selection bias is significant, thereby justifying the use of this approach. Probit results reveal that the probability to choose winter maize are influenced positively by gross return, subsistence pressure and soil suitability, whereas extension contact influences choice negatively. Stochastic cost frontier results reveal that a rise in input prices and output level increases production cost as expected. Among the variables representing the production environment, soil suitability and stability of mean temperature reduce cost, whereas precipitation increases cost. The mean level of economic efficiency is estimated at 0.91, implying that scope still exists to reduce cost further by jointly eliminating technical and allocative inefficiency. Policy implications include measures to improve soil suitability, development of temperature-resistant varieties and price policies to check input price rise while boosting maize price, which will synergistically increase adoption rate as well as profitability of winter maize cultivation in Bangladesh. © 2012 Taylor and Francis Group, LLC.