Assessing the Technical Efficiency of Rice Producers in the Parsa District of Nepal

Rice is one of the primary staple foods in Nepal, and there has been a notable increase in the production of this crop over the past ten years. Nonetheless, there appears to be a growing tendency to import rice. The plain region (Terai) of Nepal produces more than two-thirds of the country’s total rice output, with the highest productivity found in Madhesh Province. However, because of the limited knowledge regarding the technical aspects of rice production, commercial rice growers are facing challenges in using resources to produce output as effectively as possible. There is a pressing need to maximize production based on a limited number of inputs. Thus, this study aimed to examine the technical efficiency of rice farmers and the factors affecting technical inefficiency in the Parsa district of Nepal. This study area is the major domain of the Prime Minister Agriculture Modernization Project (PMAMP), which supports farmers with necessary agricultural inputs, infrastructure development, and innovative practices. Data were collected from 215 rice farmers using multistage purposive sampling and were subjected to a Cobb–Douglas stochastic frontier production function. The results showed that rice producers had a technical efficiency of 0.862. Age and off-farm activities were found to significantly influence the technical efficiency of rice farmers. The technical efficiency of rice producers could be enhanced using a project approach, such as the PMAMP. It is important for the government to implement innovations and technologies in farms with the participation of older farmers because their ability to adapt to novel techniques and technologies is better than that of young farmers. Youth generally prefer off-farm employment opportunities, so domestic investment in agriculture should be promoted to make this sector more appealing. Further, policies and programs focusing on pooling small rice fields and subsidizing the price of tractors will help improve the yield of rice.