An Efficiency Analysis of Sugarcane Farming in India: An Interstate Comparison of Performance with Data Envelopment Analysis and Malmquist Index

Background: This paper aims to evaluate the agricultural production of sugarcane in major sugarcane-producing states of India. Even though agriculture’s share of India’s GDP is decreasing, it still plays a significant role in the labor force by accounting for a sizable number of jobs. Recognizing the importance of sugarcane farming and the variations in resource availability among the states is crucial. The study highlights the importance of enhancing production management and resource allocation to increase sugarcane production and optimize inputs. Methods: The present research employs sophisticated statistical techniques, including Data Envelopment Analysis (DEA) and the Malmquist Productivity Index (MPI), to investigate the influence of variables such as land area and labor utilization on the efficacy of sugarcane cultivation at the state level spanning from 2017 to 2022. It uses DEA to analyze the connection between various agricultural inputs and the efficiency of food grain production and provides recommendations for improved resource allocation among Indian states. Result: The results of the investigation indicate that the mean efficiency of sugarcane cultivation across India is approximately 84.2%. Notably, states such as Uttar Pradesh, Tamil Nadu and Karnataka have demonstrated the highest levels of efficiency in terms of input utilization in sugarcane farming. Conversely, Bihar and Uttarakhand have emerged as the least efficient states in this regard. Furthermore, an analysis using the Malmquist productivity index indicates that Uttar Pradesh has exhibited the most significant average productivity growth, with Maharashtra and Gujarat following closely behind. Conversely, states such as Andhra Pradesh, Punjab, Haryana and Tamil Nadu have demonstrated only marginal enhancements in productivity. The study’s insights on sustainable sugarcane production and enhanced farmer-level regulatory frameworks have the potential to greatly benefit sugarcane-producing states. By implementing these ideas, we can work towards boosting revenue and reducing poverty in rural areas.