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Economic Efficiency of Rice Farms in the Thitson Dam Irrigation System in Myanmar
Thesis Abstract:
The study covered three locations of the irrigation canal in the Thitson network. One hundred fifty rice farmer respondents from three locations were personally interviewed using pre-test questionnaires.
The analytical tools used in the study were (1) comparative mean analysis (2) cost and returns analysis, (3) response function approach using Cobb-Douglas production function, (4) production yield gap by decomposition analysis, (5) income distribution of rice farmers, and (6) economic efficiency analysis (i.e., technical efficiency analysis and allocative efficiency analysis).
Results of the cost and returns analysis showed that the head farm group attained the highest net farm income per acre, followed by the tail farm group, and then the middle farm group. All three farm groups gave the best benefit and cost ratio, and were economically viable.
In the response function approach, the yield levels of rice among the three farm groups were different due to inequality of irrigation water supply. The Chow test showed that there were structural differences between head and middle, head and tail, and middle and tail farm groups.
Using logarithmic decomposition analysis, the observed yield difference between head and middle, head and tail, and middle and tail farm groups might be due to neutral technical effect and availability of irrigation water. The yield differences among the three farm groups might be due to the water use efficiency effect and not because of resource use technology effect.
The allocative efficiency analysis showed that the fertilizer used in all three farm groups and pesticide used in the middle farm group were above the optimum level. However, labor used was below the optimum level in the three farm groups. The technical efficiency analysis showed that neutral technical effect led to increased output yield in the farm groups.
The study revealed that inequality of the yield distribution and income distribution of the head farm was higher than those of the middle farm and tail farm groups. Inequality of yield distribution of rice farms was due to inequality in the availability of water because of the location of the irrigation canal. Farm size, soil type, and nonfarm incomes led to inequality in income level of the rice farmer respondents. They were considered using Lorenz curve and Gini coefficient ratio.