Impact of Bt cotton technology in an Indian cotton production system: A comparative econometric analysis between Maharashtra and Tamil Nadu
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Abstract
Cotton is one of India's most important commercial crops, known as the "White Gold." India has the largest area under cotton production with comparatively low productivity, owing to the enormous area under rainfed agriculture with insufficient input supply, implying inefficient resource usage. The present study measures the resource use efficiency and technical efficiency of Bt cotton production in Tamil Nadu in comparison with one of the major cotton-producing states, Maharashtra. The resource use efficiency was calculated using the Cobb–Douglas production function, and the stochastic frontier approach is deployed to estimate technical efficiency. Resource use efficiency analysis indicated that the majority of resources are being used at suboptimal levels, and there is the potential to increase cotton production by reaching the most profitable level of input use. However, frontier analysis confirmed that production was inefficient, with a greater gap in which both Tamil Nadu and Maharashtra, particularly small and marginal farms, need to be addressed to increase production and farm income. The results indicated that the mean technical efficiency among Bt and non-Bt farmers was 94 % and 76 % in Tamil Nadu and 97 % and 74 %, implying the potential to increase cotton production with the current level of resources and technology. This study suggested a development policy aimed at stimulating extension activity through motivation to provide rural farm households with the necessary farm management skills to boost productivity].
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Bt Cotton, Cobb–Douglas Production Function, Frontier approach, Resource Use Efficiency, Technical Efficiency
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