Assessing technical efficiency and return to scale in shrimp farming in Hormuzgan Province, Iran

Due to increased shrimp production costs and consequent final price, shrimp farmers in Hormuzgan province have lost their advantage in the domestic and international markets. In this connection, technical and economic efficiency enhancement can be a way to decrease shrimp cost price. In this study, using data envelope analysis (DEA) and an input-oriented model, technical and scale efficiency of 26 shrimp farms were measured in the province in the year 2006. Results show that 54% of shrimp farms are technically inefficient, while minimum and average pure technical efficiency are 0.69 and 0.92 respectively. Also, 77% of shrimp farms have scale inefficiency and minimum and average of scale efficiency were 0.59 and 0.90, respectively. In addition, 73% of the farms have increasing return to scale. As a result, shrimp production costs can be reduced even more using economy of scale.