Total factor productivity growth of sugarcane in Uttar Pradesh: Parametric and non-parametric analysis

Abstract

Productivity growth measurement remains a very essential for taking appropriate policy decision for the development of the agricultural sector. The present study measures total factor productivity growth of sugarcane in Uttar Pradesh leading producer of India. Parametric Stochastic Frontier Analysis (SFA) and Non-Parametric Data Envelopment Analysis (DEA) are used for this study. The results indicated the robustness of the methodology used, the TFP has witnessed a negative growth for the overall period the MLE estimates also suggested a non significant behavior. Sugarcane being a labour and capital intensive crop, however the low PECH in comparison to SECH of Uttar Pradesh suggested that inefficiency is mainly due to inefficient sugarcane production practices. For sugarcane production to sustain in the future, the government must look carefully into the factors which have led to a decline in the TFP growth over the years.