Role of Credit on Production Efficiency of Farming Sector in Pakistan(A Data Envelopment Analysis)
The study identified the sources of production
inefficiency of the farming sector in district Faisalabad in the Punjab
province of Pakistan. Data Envelopment Analysis (DEA) technique
was utilized at farm level survey data of 300 farmers for the year
2009. The overall mean efficiency score was 0.78 indicating 22
percent inefficiency of the sample farmers. Computed efficiency
scores were then regressed on farm specific variables using Tobit
regression analysis. Farming experience, education, access to
farming credit, herd size and number of cultivation practices showed
constructive and significant effect on the farmer-s technical
efficiency.
[1] Adams, D. W. & Delbert A. F. (1992). Edited by Informal Finance in
Low-income Countries, Westview Press, Colorado, 1992
[2] Aleem, I., (1990). Imperfect information, screening, and the costs of
informal lending: A study of rural credit market in Pakistan. World Bank
Economic Review, 4(3), 329-349.
[3] Bravo-Ureta, B. E. & Pinheiro. A. E., (1997). Technical, economic and
allocative efficiency in peasant farming: Evidence from the Dominican
Republic. The Developing Economies, 35, 48-67.
[4] Coelli T. D. S., Rao P. & Battese, G. E. (1998). An introduction to
efficiency and productivity analysis. Boston MA: Kluwar Academic
Publishers
[5] David, C. & Mayer, L. R. (1980). Measuring the farm level impact of
agricultural loans, in borrowers and lenders: rural financial Markets and
Institutions in Developing Countries. London: Overseas Development
Institute, 201-234.
[6] Farrell, M.J. (1957). The measurement of productive efficiency. Journal
of the Royal Statistical Society (A, general), 120, 253-281.
[7] Feder, G., Lawrence J., Lau, J., Lin, Y., & Luo, X., (1990). The
relationship between credit and productivity in Chinese agriculture: A
microeconomic model equilibrium. American Journal of Agricultural
Economics, 72(5), 1151-1157.
[8] GOP (2008) Economic Survey of Pakistan, Government of Pakistan,
Finance Division, Islamabad.
[9] Hanif, M., Khan, S. & Nauman, F., (2004). Agricultural perspective and
policy. ISBN 969-8581-06-5 Ministry of Food, Agriculture and
Livestock (MINFAL), Islamabad.
[10] Iqbal, M., Ahmad, M. & Abbas, K. (2003). The impact of institutional
credit on agricultural production in Pakistan. The Pakistan Development
Review, 42 (4), 469-485.
[11] Lovell, C. A. K. (1993). Production frontier and productive efficiency.
The Measurement of Productive Efficiency, Oxford University Press,
New York, 3-67.
[12] Malik, S. J. (1999). Poverty and rural credit: the case of Pakistan.
Pakistan Institute of Development Economics Islamabad.
[13] Meeusen, W. and Broeck, J. V. (1977). Efficiency estimation from cobbdouglas
production functions with composed errors. International
Economic Review, 18, 435-444.
[14] Ogen, O. (2007). The agricultural sector and Nigeria-s development:
comparative perspectives from the Brazilian agro industrial economy,
1960-1995. Nebula Journal Australia, 4(1), 184-194.
[15] Olagunju, F.I. & Adeyemo, R. (2007). Agricultural credit and production
efficiency of small-scale farmers in south-eastern Nigeria. Agricultural
Journal 2(3), 426-433.
[16] Qureshi, S. K & Shah, A. (1992). A critical review of rural credit policy
in Pakistan. The Pakistan Development Review, 31(4), 781-801.
[17] Ray, S. C. (2004). Data envelopment analysis: theory and techniques for
economics and operations research. The University of Cambridge Press,
U K.
[18] Sial, H. M. & Carter, M. R. (1996). Financial market efficiency in an
agrarian economy: micro econometric analysis of the Pakistan Punjab.
The Journal of Development Studies, 32(5), 771-798.
[19] Zuberi, H. A. (1989). Production function, Institutional credit and
agricultural development in Pakistan. The Pakistan Development
Review, 28(1), 43-56.
[1] Adams, D. W. & Delbert A. F. (1992). Edited by Informal Finance in
Low-income Countries, Westview Press, Colorado, 1992
[2] Aleem, I., (1990). Imperfect information, screening, and the costs of
informal lending: A study of rural credit market in Pakistan. World Bank
Economic Review, 4(3), 329-349.
[3] Bravo-Ureta, B. E. & Pinheiro. A. E., (1997). Technical, economic and
allocative efficiency in peasant farming: Evidence from the Dominican
Republic. The Developing Economies, 35, 48-67.
[4] Coelli T. D. S., Rao P. & Battese, G. E. (1998). An introduction to
efficiency and productivity analysis. Boston MA: Kluwar Academic
Publishers
[5] David, C. & Mayer, L. R. (1980). Measuring the farm level impact of
agricultural loans, in borrowers and lenders: rural financial Markets and
Institutions in Developing Countries. London: Overseas Development
Institute, 201-234.
[6] Farrell, M.J. (1957). The measurement of productive efficiency. Journal
of the Royal Statistical Society (A, general), 120, 253-281.
[7] Feder, G., Lawrence J., Lau, J., Lin, Y., & Luo, X., (1990). The
relationship between credit and productivity in Chinese agriculture: A
microeconomic model equilibrium. American Journal of Agricultural
Economics, 72(5), 1151-1157.
[8] GOP (2008) Economic Survey of Pakistan, Government of Pakistan,
Finance Division, Islamabad.
[9] Hanif, M., Khan, S. & Nauman, F., (2004). Agricultural perspective and
policy. ISBN 969-8581-06-5 Ministry of Food, Agriculture and
Livestock (MINFAL), Islamabad.
[10] Iqbal, M., Ahmad, M. & Abbas, K. (2003). The impact of institutional
credit on agricultural production in Pakistan. The Pakistan Development
Review, 42 (4), 469-485.
[11] Lovell, C. A. K. (1993). Production frontier and productive efficiency.
The Measurement of Productive Efficiency, Oxford University Press,
New York, 3-67.
[12] Malik, S. J. (1999). Poverty and rural credit: the case of Pakistan.
Pakistan Institute of Development Economics Islamabad.
[13] Meeusen, W. and Broeck, J. V. (1977). Efficiency estimation from cobbdouglas
production functions with composed errors. International
Economic Review, 18, 435-444.
[14] Ogen, O. (2007). The agricultural sector and Nigeria-s development:
comparative perspectives from the Brazilian agro industrial economy,
1960-1995. Nebula Journal Australia, 4(1), 184-194.
[15] Olagunju, F.I. & Adeyemo, R. (2007). Agricultural credit and production
efficiency of small-scale farmers in south-eastern Nigeria. Agricultural
Journal 2(3), 426-433.
[16] Qureshi, S. K & Shah, A. (1992). A critical review of rural credit policy
in Pakistan. The Pakistan Development Review, 31(4), 781-801.
[17] Ray, S. C. (2004). Data envelopment analysis: theory and techniques for
economics and operations research. The University of Cambridge Press,
U K.
[18] Sial, H. M. & Carter, M. R. (1996). Financial market efficiency in an
agrarian economy: micro econometric analysis of the Pakistan Punjab.
The Journal of Development Studies, 32(5), 771-798.
[19] Zuberi, H. A. (1989). Production function, Institutional credit and
agricultural development in Pakistan. The Pakistan Development
Review, 28(1), 43-56.
@article{"International Journal of Business, Human and Social Sciences:50127", author = "Saima Ayaz and Zakir Hussain and Maqbool Hussain Sial", title = "Role of Credit on Production Efficiency of Farming Sector in Pakistan(A Data Envelopment Analysis)", abstract = "The study identified the sources of production
inefficiency of the farming sector in district Faisalabad in the Punjab
province of Pakistan. Data Envelopment Analysis (DEA) technique
was utilized at farm level survey data of 300 farmers for the year
2009. The overall mean efficiency score was 0.78 indicating 22
percent inefficiency of the sample farmers. Computed efficiency
scores were then regressed on farm specific variables using Tobit
regression analysis. Farming experience, education, access to
farming credit, herd size and number of cultivation practices showed
constructive and significant effect on the farmer-s technical
efficiency.", keywords = "Agricultural credit, DEA, Technical efficiency,Tobit analysis", volume = "4", number = "6", pages = "611-6", }