Drivers of Production and Efficiency of Onion Cultivation in Bangladesh

Abstract

The study identifies the drivers of production and technical efficiency in onion cultivation based on a survey of 300 farmers from three different major onion growing districts in Bangladesh by applying a stochastic production frontier approach. Results reveal that land is the most important driver of production (elasticity value 0.33) followed by labour (0.24) and seed (0.18). Use of modern seed significantly improves production. A constant returns to scale exists in onion production. The mean technical efficiency is estimated at 67% implying that output can be increased substantially by 49% by eliminating inefficiencies in production. Extension contact, use of recommended dose of fertilizers and non-agricultural income significantly improve technical efficiency. Efficiency is significantly higher for owner operators and diversified farms. Policy implications include investments in extension services and land reform measures to improve land ownership in order to boost onion production in Bangladesh.