Efficiency Differentials in Wheat Cultivation and Their Implication for Development Policies

This paper examines the efficiencies of resource use and changes in the input structure in temporal and spatial framework in respect of wheat for the five important states of the country during the period mid-seventies to mid-eighties. As a consequence of technical change there has been significant improvement in the yield of wheat as well as reduction in its unit cost in real terms in all the five states. In the process of technological development there has also occurred structural change in the input-mix. While the use of human and bullock labour has declined, the use of modern inputs such as fertilizers, machinery, etc., has increased significantly over the period. An analysis of disaggre¬gated farm level data reveals as to how the technical and allocative efficiencies have been influenced by the technical change and entrepreneurial ability as reflected through the yield levels and allocation of resources leading to cost minimisation. The most technologically efficient farmers through increasing the intensity of input use were able to harvest much higher yield with lower estimates of cost of production as compared to the farmers of the least efficient category. In the case of allocative efficiency, the farmers belonging to the most efficient category were also able to realise higher yield with lower cost estimates vis-a-vis inefficient farmers and both, the estimates of yield and cost of production, happened to be lower in comparison to those of the yield efficient farmers. An attempt has also been made to estimate the return to investment and relative share of inputs in the cost of cultivation among the most and least efficient farmers with a view to devise policy instruments for the efficient resource utilization and maximisation of production at a lower unit cost. The analysis reveals as to how the most economically efficient farmers were able to obtain the highest profit as compared to the most efficient farmers of technical and allocative efficiencies. The relative share of various inputs in the cost of cultivation of most efficient farmers suggests that there exists enough potential for pushing up the yield levels at much lower cost through efficient utilization of resources.