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Profit Efficiency among Basmati Rice Producers in Pakistan Punjab

Mubarik Ali and John C. Flinn
American Journal of Agricultural Economics
Vol. 71, No. 2 (May, 1989), pp. 303-310
Stable URL: http://www.jstor.org/stable/1241587
Page Count: 8
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Profit Efficiency among Basmati Rice Producers in Pakistan Punjab
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Abstract

Farm-specific profit inefficiency among Basmati rice producers was estimated from a variable-coefficient profit frontier. The mean level of inefficiency at farm resources and price levels was 28%, with a wide range (5%-87%). Average loss of profit was Rs 1,222 per hectare. Socioeconomic factors related to profit loss were the farm household's education, nonagricultural employment, and a credit constraint. Institutional determinants of profit loss were a water constraint and the late application of fertilizer. Punjab-wide benefits of increasing farmer's profit efficiency are large; a 25% reduction in profit loss among Basmati rice producers may generate over Rs 240 million in extra profits each rice season.

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