Technical Efficiency of Cotton Production in Iran Using Panel Data Models

Increasing the efficiency of agricultural products is an important factor affecting the high performance without additional cost. According to the limitations of the agricultural sector to increase production through the development of production factors, it seems the best way to achieve appreciate growth in agricultural production is to improve and increase the efficiency of agricultural crop producing provinces. In this regard, this paper applied a stochastic frontier analysis to measure technical efficiency of Iran’s cotton production using panel data for the period of 2000-2012. For all the models, the estimated output elasticity of inputs as pesticide, chemical fertilizer and labor was positive and significant. Results indicated that production process was applied in the economic zone. According to most of the models, Khorasan, Ardebil and East Azerbaijan were the most efficient provinces, standing on the first to third ranks, respectively. Time distribution of technical efficiency indicated that the technical efficiency of provinces had decreased during the study period. Differences between minimum and maximum efficiency rates of provinces reflected the fact that it was possible to reallocate proper input usage and management. On the other hand, due to suitable climate, fertile soil and favorable moisture conditions of Ardebil province for cotton production, this province has to be considered as one of the material and immaterial resources distribution indices by government. In addition, the results showed that machinery led to a significant increase in technical efficiency in cotton production; therefore, the usage of new technology and machinery was recommended in cotton production. Finally, it was recommended for further studies to use model twelve in efficiency measurement; furthermore, investigation of sources of technical inefficiency revealed that inorganic fertilizer resulted in reduction in the technical efficiency.