Mi a, Sandip; Dip o, Md. Rashid Ase ; Ankon, Yasin Ib ahim
A icle
Does c edi cons ain ma e o echnical e iciency,
echnological shi s, and p o i abili y o lowe g owe s? An
empi ical s udy
Cogen Economics & Finance
P o ided in Coope a ion wi h:
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Sugges ed Ci a ion: Mi a, Sandip; Dip o, Md. Rashid Ase ; Ankon, Yasin Ib ahim (2024) : Does c edi
cons ain ma e o echnical e iciency, echnological shi s, and p o i abili y o lowe g owe s?
An empi ical s udy, Cogen Economics & Finance, ISSN 2332-2039, Taylo & F ancis, Abingdon, Vol.
12, Iss. 1, pp. 1-15,
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Does c edi cons ain ma e o echnical
efficiency, echnological shi s, and p ofi abili y o
flowe g owe s? An empi ical s udy
Sandip Mi a, Md. Rashid Ase Dip o & Yasin Ib ahim Ankon
To ci e his a icle: Sandip Mi a, Md. Rashid Ase Dip o & Yasin Ib ahim Ankon (2024)
Does c edi cons ain ma e o echnical efficiency, echnological shi s, and p ofi abili y
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GENERAL & APPLIED ECONOMICS | RESEARCH ARTICLE
Does c edi cons ain ma e o echnical e iciency, echnological
shi s, and p o i abili y o lowe g owe s? An empi ical s udy
Sandip Mi a
a
, Md. Rashid Ase Dip o
b
and Yasin Ib ahim Ankon
c
a
Depa men o Ag icul u al Finance and Coope a i es, Bangabandhu Sheikh Mujibu Rahman Ag icul u al Uni e si y,
Mymensingh, Bangladesh;
b
Depa men o Ag icul u al Ex ension and Ru al De elopmen , Bangabandhu Sheikh Mujibu
Rahman Ag icul u al Uni e si y, Mymensingh, Bangladesh;
c
Depa men o Ag ibusiness, Facul y o Ag icul u al Economics
and Ru al De elopmen , Bangabandhu Sheikh Mujibu Rahman Ag icul u al Uni e si y, Mymensingh, Bangladesh
ABSTRACT
This s udy aims o in es iga e he a ia ions in e iciency, echnology gap, and p o i -
abili y o lowe p oduce s depending on hei c edi cons ain posi ion. A o al o
160 lowe a me s ha e been selec ed om Bangladesh by using a mul is age sam-
pling echnique. Me a- on ie Da a En elopmen Analysis (DEA) is employed o es i-
ma e he e iciency di e ences and echnological gaps depending on he c edi
cons ain si ua ion. A he same ime, he Tobi eg ession model is used o es ima e
he ac o s in luencing he me a- echnical e iciency o lowe a me s. P o i abili y di -
e ences depending on he c edi cons ain si ua ion a e iden i ied using he g oss
ma gin and bene i cos a io. The mean me a- echnical e iciency o Ma igold a me s
is highes when uncons ained (0.73) and lowes when c edi is cons ained (0.64) ela-
i e o he me a- on ie , which indica es ou pu could be inc eased by 27 and 36%,
espec i ely, wi hou inc easing inpu . On he o he side, he e iciency o c edi -
uncons ained ose a me s is sligh ly highe han ha o cons ained ose a me s. In
addi ion, c edi -cons ained ma igold a me s achie e he lowes echnological gap
a io (0.64) compa ed o c edi -uncons ained a me s. Sociodemog aphic and a m
cha ac e is ics such as educa ion, sou ce o seed, land enu e, a m a ea, and age ha e
a signi ican posi i e impac , while ea ning amily membe s, ypes o lowe s, and
c edi cons ain s ha e a signi ican nega i e e ec on he echnical e iciency o
lowe a me s. The p o i abili y o c edi -uncons ained ma igold and ose a me s is
highe han ha o c edi -cons ained a me s. Facili a ing he loan applica ion p o-
cess, easing he p e-condi ions o loan accep ance, and adjus ing he epaymen
schedule help o emo e he c edi -cons ained si ua ion.
IMPACT STATEMENT
Bangladesh’s lo icul u e indus y has signi ican po en ial, bu small-scale a me s ace
challenges due o limi ed access o c edi . High in e es a es and s ic colla e al
equi emen s hinde hei abili y o imp o e echnical e iciency, echnological gap,
and p o i abili y. This s udy add esses he o en-o e looked impac o c edi con-
s ain s on lowe a me s’e iciency, echnological gap, and p o i abili y. Fa me s wi h
access o c edi a e mo e e icien , as imely in es men in inpu s inc eases p oduc i -
i y and p o i abili y. In con as , limi ed c edi access hampe s inpu applica ion, educ-
ing bo h p oduc i i y and echnical e iciency, apping a me s in low-p o i cycles,
and inc easing he echnological gap. Resea che s in e es ed in he inancial con-
s ain s in ag icul u e and hei e ec on p oduc i i y, e iciency, and p o i abili y can
gain aluable insigh s om his s udy. I also emphasizes he need o policymake s o
enhance access o a o dable c edi by lowe ing in e es a es and easing colla e al
equi emen s, which will help boos p oduc i i y and suppo he sus ainable g ow h
o Bangladesh’s lo icul u e sec o .
ARTICLE HISTORY
Recei ed 11 Oc obe 2023
Re ised 17 July 2024
Accep ed 29 Augus 2024
KEYWORDS
C edi cons ain ; echnical
e iciency; echnological
gap; p o i abili y; lowe
SUBJECTS
Finance; Ru al
De elopmen ; De elopmen
S udies
CONTACT Sandip Mi a [email p o ec ed] Depa men o Ag icul u al Finance and Coope a i es, Bangabandhu Sheikh Mujibu
Rahman Ag icul u al Uni e si y, Mymensingh, Bangladesh.
ß2024 The Au ho (s). Published by In o ma UK Limi ed, ading as Taylo & F ancis G oup
This is an Open Access a icle dis ibu ed unde he e ms o he C ea i e Commons A ibu ion License (h p://c ea i ecommons.o g/licenses/by/4.0/), which
pe mi s un es ic ed use, dis ibu ion, and ep oduc ion in any medium, p o ided he o iginal wo k is p ope ly ci ed. The e ms on which his a icle has been
published allow he pos ing o he Accep ed Manusc ip in a eposi o y by he au ho (s) o wi h hei consen .
COGENT ECONOMICS & FINANCE
2024, VOL. 12, NO. 1, 2399958
h ps://doi.o g/10.1080/23322039.2024.2399958
1. In oduc ion
Globally, he lo icul u e indus y has expe ienced d ama ic change wi hin he pas ew decades ega d-
ing p oduc i i y and mode n echnology adop ion in lowe a ming (Mi a e al., 2022). I has become a
luc a i e sec o because o i s con ibu ion o employmen gene a ion, li elihood de elopmen , and
educing inequali y and po e y due o i s g ea e po en ial o expo and e enue ea nings om com-
pa ably lowe capi al in es men s (Tizazu & Wo kie, 2018). Because o he business oppo uni ies i
p esen s, he compe i i e dynamic is changing, and p oduc ion is ans e ing o de eloping na ions
(C¸€
u €
uk & Alp ekin, 2022). Bangladesh has had an eno mous change in he lo icul u e sec o o e he
pas ew yea s. Fa me s ha e made a e olu ion in ecen yea s. The lo icul u e indus y has g own by
almos 15% pe yea , gene a ing Tk 1600 c o e in annual u no e in Bangladesh. The lowe socie y has
claimed ha 95% o p oduc ion can mee domes ic demands and he es , 5% is expo ed o China and
o he coun ies (Sohel, 2022). Almos 3930 hec a es o land ha e been used o lowe cul i a ion in
ecen yea s, whe eas only 931 hec a es o land we e used in FY2009-10 (BBS, 2009–2010; BBS, 2020–
2021). Comme cial lowe a ming equi es huge capi al in es men because o he in ensi e use o mod-
e n inpu s which a e ela i ely mo e expensi e (Adesina & Zinnah, 1993; Ahmed & Hasan, 2007; Doss &
Mo is, 2001; Quag ainie e al., 2010). This indus y c ea es bedding, ga den plan s, po ed lowe ing
plan s, cu lowe s, and lo icul u e p oduc s, which inc eases he necessi y o mode n inpu s mani old
(Mony e al., 2018). Due o a lack o capi al, a me s a e unable o a o d he inc easing expenses o
a ming. Fa me s in de eloping coun ies o en li e below he po e y line and hei inancial condi ion
canno a o d he massi e capi al equi emen (Rea don & Vos i, 1995). Mo eo e , he p oduc i i y o
c ops depends on imely inpu use (Mi a e al., 2019; Begum e al., 2023). The e o e, access o c edi is
impe a i e o unning an e ec i e, success ul, and p o i able lowe a m (Ca lisle e al., 2019).
Ne e heless, i appea s ha he cu en low o capi al is insu icien o lowe a ming. In ecen yea s,
ac ual c edi disbu semen has been sligh ly highe han a ge ed bu no as much as demanded
(Figu e 1).
Ins i u ional c edi in Bangladesh is gene ally p o ided by go e nmen and p i a e banks and non-
go e nmen o ganiza ions (Mehedi e al., 2020). Ins i u ional and non-ins i u ional c edi is a ailable o
he a me s bu no o an ex en whe e i can mee he demand (Mi a e al., 2019). Non-ins i u ional
c edi is p o ided in e y small amoun s o a anging social i uals (ma iage, une als, e c.) bu i is no
in ended o p o ide big loans o lowe g owe s (Chen, 2003; Fede e al., 1990). The e o e, ins i u ional
c edi is he key sou ce o lowe a ming bu colla e al is he p econdi ion o ecei ing ins i u ional
c edi . The a me uses hei a mland, a mhouse, and o he du able p ope ies as colla e al (Tamu a &
Tabakis, 2013). Howe e , mos a me s do no ha e such ypes o asse s ha can be used as colla e al,
Figu e 1. Ac ual and a ge ed c edi disbu semen in ag icul u e Sou ce: Bangladesh Bank 2004–2021.
2 S. MITRA ET AL.
which leads o a c edi cons ain si ua ion (Fede e al., 1988). Acco ding o ea lie s udies on ag icul-
u e, c edi cons ain s ha e signi ican nega i e e ec s on a m ou pu , echnology adop ion, a m
in es men , and a m p o i (An wi e al., 2017; Engle & Kuma , 2011; Ly & Nguyen, 2014). In mos cases,
c edi -cons ained a me s a e unable o di e en ia e be ween lowe p oduc ion expenses and amily
consump ion expenses, which ce ainly in luence hei op imal inpu uses. Consequen ly, c edi -con-
s ained a me s ha e less p oduc i i y han uncons ained ones and ha e less p o i abili y, e iciency,
and sa ings (Amanullah e al., 2020; Mi a e al., 2019). Low sa ings lead o low in es men in du able
asse s. The lack o in es men in du able p ope ies educes he colla e al o he a m and u he
inc eases he c edi cons ain p oblem (Fe n
andez-Villa e de & K uege , 2011). I is di icul o a con-
s ained a me o o e come he icious ci cle (Mi a e al., 2019). So, in his s udy, we a e going o
answe he ollowing ques ions: A e he e any di e ences in p o i abili y, e iciency, and echnological
gaps among lowe a me s depending on he c edi -cons ained si ua ion? This s udy is ca ied ou in
wo dis ic s o Bangladesh because hese dis ic s con ibu e mo e han 80% o he o al lowe p oduc-
ion o Bangladesh and lack o c edi access is a c ucial p oblem all o e he coun y (BBS, 2020–21;
Mi a e al., 2019).
Howe e , se e al s udies ha e examined he p o i abili y and li elihood e ec s o lo icul u e in de el-
oping coun ies. Se u (2018) in es iga ed he in luence o lowe a ming on a me s’li elihoods in he
Jhenaidah dis ic o Bangladesh. They ound ha 76.5% o a me s gained medium li elihood imp o e-
men h ough lowe cul i a ion, while 13.9% had a high impac on lowe p oduce s’li elihood. Yeung
and Yee (2010) in es iga ed he de e minan s o consume s pu chasing p e e ences a he lowe ma ke
and ound ha dis inc packaging, heal hy p oduc s, special p ice o e s, and ee sample as ings ha e
he highes in luence on pu chasing in en ion. Raha and Siddika (2004) examined he exis ing ma ke ing
sys em, ma ke ing cos , and ma gins o di e en lowe s om di e en ma ke ing channels and ound
ha lowe a me s ecei ed 30.75 o 60.42% o he consume ’s aka, while 24.71 o 58.5% we e spen as
he ma ke ing cos . In addi ion, Singh e al. (2014), Mou (2012), and Momo az and Banik (2020) ocused
mainly on he ma ke p ice and p o i abili y o di e en lowe s. Mi a e al. (2022) in es iga ed he
e ec s o he COVID-19 pandemic on he sa is ac ion le el o lowe a me s, ma ke p ices, a m income,
p o i abili y, e iciency, and echnological shi s o lowe a me s in Bangladesh. Kuma e al. (2023) iden-
i ied he economic iabili y o di e en echniques o lowe d ying along wi h in luencing ac o s like
e iciency, economic easibili y, lowe was e managemen , and sus ainabili y. Chowdhu y and Khan
(2015) and Laboni e al. (2019) s udied he expo po en iali y o di e en lowe s. The abo e discussions
p o ide signi ican sh eds o e idence ha lowe a ming is highly p o i able, which assis s in imp o ing
he li elihood o lowe a me s. Howe e , he e ec o c edi cons ain s on he e iciency, echnological
gap, and p o i abili y o lowe a me s emains igno ed. This s udy is going o en ich he li e a u e
ega ding he inancial access o lowe a me s as well as i s e ec on hei echnical e iciency, echno-
logical gap, and p o i abili y.
2. Me hodology
2.1 S udy a ea, sample size, and da a collec ion
This s udy is ca ied ou in he Jasho e and Sa a dis ic s o Bangladesh, which a e well-known o hei
lo icul u e. Mul i-s age sampling p ocedu es we e ollowed o da a collec ion. In he i s s age, he
da a we e collec ed om wo lowe -p oducing dis ic s o Bangladesh, namely, Jasho e and Dhaka.
These dis ic s cap u e mo e han 80% o he o al lowe p oduc ion in Bangladesh, which is shown in
Figu e 2. The o al popula ion size o lowe a me s is abou 7000 (BBC, 2021). In he second s age, upa-
zila-le el lowe p oduc ion and a m in o ma ion we e collec ed om he Dis ic Ag icul u e O ice ,
and wo upazilas (Jhika gacha and Sa a ) we e selec ed om hese wo dis ic s based on he p oduc-
ion olume. Finally, lowe a m lis s we e collec ed om he Upazila Ag icul u e O ice om all upazi-
las, and a o al o 160 lowe a ms ( ose and ma igold) we e selec ed andomly, o which 59 a me s
we e c edi cons ain s and 101 we e c edi -uncons ain . Rose and ma igold a me s ha e cap u ed
mo e han 80% o he lowe ma ke in Bangladesh (BBS, 2020–21). Da a has been collec ed using a p e-
es ed ques ionnai e. The in e iew schedule includes in o ma ion on a m and o - a m income
COGENT ECONOMICS & FINANCE 3
condi ions, he inpu used and ou pu p oduced, he ma ke p ice o lowe s, p oblems aced du ing
lowe a ming, sa is ac ion le el abou inpu -ou pu quan i y, p ice o lowe s, and cus ome s’a ailabil-
i y. The ace- o- ace in e iew me hod was applied o collec he da a. A ew ully ained and expe i-
enced g adua e s uden s we e in ol ed in da a collec ion om he lowe a me s.
2.2 Analy ical echniques
2.2.1 Iden i ying he echnical e iciency and echnological gap di e ences depending on c edi
cons ained si ua ion
Me a- on ie Da a En elopmen Analysis (DEA) is used o iden i y he e iciency and p oduc ion possibil-
i y di e ences depending on c edi -cons ained si ua ions (Cha nes e al., 1994; Coope e al., 2002). Two
sepa a e p oduc ion unc ions a e o med o c edi -cons ained and uncons ained lowe a ms. These
on ie s a e known as g oup on ie s o compa e he pe o mance ac oss he a ms wi hin each g oup
(Asmild, 2015; Jiang & Sha p, 2015; Mi a e al., 2022). An addi ional p oduc ion on ie is designed by
pooling bo h cons ained and uncons ained a me s. This on ie is o med, known as he me a on ie
(MF), o compa e pe o mance ac oss he g oups. The ou pu -o ien ed model is employed o iden i y
he e iciency di e ences. The ou pu -o ien ed model can be de ined as I g oup h (he e h ¼1, …,2)
consis s o da a on L
h
a ms he linea p og amming (LP) p oblem sol ed o he i h a m can be con-
s uc ed as ollows (Boge o & O o, 2010):
Figu e 2. S udy a eas selec ed in Bangladesh.
4 S. MITRA ET AL.
MEi¼1=Maxk,uƟ,
such ha ,
–ƟyiþYhk0
xi−Xhk0 (1)
k0
whe e, y
i
and x
i
a e he M 1 and N 1 ec o o ou pu s and inpu s o he i h Decision-Making Uni s
(DMUs), espec i ely; Y
h
is he M L
h
ma ix o ou pu quan i ies o all L
h
uni s, and X
h
is he N L
h
ma ix o inpu quan i ies o all L
h
uni s; kis an L
h
ec o o weigh s and Ɵis scala p o iding he in o -
ma ion on echnical e iciency (Manage ial E iciency) o he i h a m.
In he case o me a- on ie , he abo e Linea P og amming (LP) is e- un wi h he same inpu and
ou pu ma ices con aining da a o all DMUs om bo h g oups, L ¼PhLh, ha is,
MTEi¼1=MaxƟ0,k0Ɵ0,
such ha
−Ɵ0yiþYk00,
xi−X0k00, (2)
k00,
whe e, y
i
and x
i
a e he M 1 and N 1 ec o o ou pu and inpu quan i ies, espec i ely, o he i h
uni : Y’and X’a e he M L and N L ma ix o ou pu and inpu quan i ies, espec i ely, o all L uni s;
k’is an L 1 ec o o weigh s, and Ɵ’is a scala .
In his app oach, bo h manage ial e iciency and me a- echnical e iciency (TE) sco es can be calcu-
la ed. Manage ial e iciency (ME) is assessed by he dis ance be ween each DMU and i s g oup on ie ,
whe eas me a- echnical e iciencies (MTE) a e de e mined by he dis ance be ween each DMU and he
MF. The dis ance be ween he DMU’s g oup on ie and he me a- on ie can also be measu ed as he
echnology gap a io (TGR) o each obse a ion. The equa ion is as ollows:
TGRh
i¼MTEi
MEi
(3)
The lowe di e ence in p oduc ion possibili ies be ween g oup and me a- on ie is indica ed when
he mean TGR is close o 1.
2.2.2 De e minan s o echnical e iciency
As he e iciency sco e ela i e o he me a- on ie a ies om 0 o 1, de e minan s o echnical e i-
ciency canno be es ima ed e icien ly by using o dina y leas squa es (Alam, 2011; Kaliba & Engle, 2006;
Woold idge, 2012). Hence, he Tobi eg ession model is be e o his analysis (Jehu-Appiah e al., 2014;
P odhan & Khan, 2018). We used he ins umen al a iable Tobi eg ession model because he model
inco po a ed endogenei y. Fa me s’colla e al is employed as an ins umen al a iable, while c edi con-
s ain s a e an endogenous a iable. Since i is an icipa ed ha colla e al will ha e an indi ec impac on
he dependen a iable (e iciency sco e) and a di ec impac on he endogenous a iable (C edi con-
s ain s), we ha e used i as an ins umen al a iable. The empi ical ins umen al a iable (IV) Tobi
eg ession is as ollows:
Y¼a0þb1X1þb2X2þb3X3þb4X4þb5X5þb6X6þb7X7þb8X8þb9X9þb10X10 þui(4)
whe e Y ¼E iciency o lowe a me s; X1¼Fa m a ea (decimal); X2¼Age (Yea s); X3¼T aining (in
days); X4¼Ea ning amily membe s (numbe s); X5¼Educa ion (Yea s o schooling); X6¼Sou ce o seed
(I own ¼1, Buy ¼0); X7¼Land enu e sys em (Owned ¼1, Cash enan ¼0); X8¼C edi cons ained
(I cons ained ¼1, uncons ained ¼0); X9¼Types o lowe (I Ma igold ¼1, Rose ¼0); X10¼O a m
income (I yes ¼1, o he wise ¼0) and u
i
¼e o e m.
COGENT ECONOMICS & FINANCE 5
2.2.3 Iden i y he p o i abili y di e ences be ween he c edi cons ain and uncons ained a me s
Besides, p o i abili y di e ences be ween Ma igold and Rose depending on c edi -cons ained si ua ions
ha e been iden i ied by using g oss e u n, g oss ma gin, Bene i -Cos Ra io (BCR), and b eak-e en poin .
We ha e sepa a ely analysed he p o i abili y o ma igold and ose because hey a e annual and pe en-
nial lowe s, espec i ely. To al a iable cos s such as labou , seedlings, e ilise , insec icides, and ha -
es ing cos s o ose and ma igold a ming may a y due o di e ences in he p oduc ion sys em and
he e ec o seasonal demand.
2.2.4 E hical s anda d
The e hical s anda d was main ained du ing he esea ch and i was app o ed by he Resea ch
Managemen Commi ee (RMC) o Bangabandhu Sheikh Mujibu Rahman Ag icul u al Uni e si y. Be o e
each in e iew, he esea ch pu pose and he con iden iali y o he da a we e desc ibed o each a me ,
and hen hei e bal consen o p o ide in o ma ion olun a ily was aken. The ques ionnai e con en
and p ocedu e we e p ope ly e iewed by he esea ch eam.
3. Resul s and discussion
3.1 Desc ip i e s a is ics o socio-demog aphic cha ac e is ics
C edi uncons ain a me s a e hose who can un hei a ms wi hou any c edi o i hey a e ge ing
he necessa y c edi . On he o he hand, c edi -cons ain a me s a e hose who ha e no ecei ed hei
demanded c edi o do no ha e access o al e na i e sou ces o c edi (Dong e al., 2012; Fede e al.,
1990; Gui kinge & Bouche , 2008). Table 1 demons a es he desc ip i e s a is ics o he socio-demo-
g aphic cha ac e is ics o ose and ma igold a me s. The indings indica e ha ma igold g owe s a e
mo e c edi -cons ained han ose g owe s. Ma igold a me s ha e smalle a ms han ose p oduce s.
This smalle a m may inc ease he possibili y o a c edi -cons ained si ua ion. On he o he side, ose
a me s can use hei compa a i ely la ge a mland as colla e al o ob ain he equi ed loan, which
makes hei c edi uncons ained (Mi a e al., 2019). Addi ionally, 55% o ma igold g owe s a med on
sel -owned land, while 75% o ose a me s a med on hei own a ms. Thus, 45% o ma igold g owe s
a med in en ed inland and hose a me s canno use hei own land as colla e al o ecei ing inanc-
ing. On he o he side, ose a me s can u ilise hei own land as colla e al. The a e age amily size o
ose a me s is 5.80, sligh ly highe han he na ional a e age amily size (P odhan & Khan, 2018). The
expe ience o ose g owe s is g ea e han ha o ma igold g owe s, which may aid in hei unde s and-
ing o he c edi applica ion and p ocessing p ocedu es ha enable hem o ha e access o c edi wi h-
ou es ic ion. Mi a e al. (2019) and Rusiana e al. ound a simila esul in he case o ag icul u e
a ming. Ma igold a me s ha e mo e o - a m income compa ed o hei coun e pa s.
The esul ’s mos likely explana ion is ha , due o hei highe p o i abili y om ose a ming, hey
a e conside ably less ac i e in o he o - a m businesses. On he o he side, ma igold a me s a e com-
pa a i ely less ocused on hei a ming because o hei lowe p o i abili y. Mo eo e , Neh ing and
Table 1. Desc ip i e s a is ics o socio-demog aphic cha ac e is ics o lowe a me s.
Socio-demog aphic cha ac e is ics
Rose Ma igold
Mean S anda d De ia ion Mean S anda d De ia ion
C edi cons ain (Cons ain ¼1, Uncons ain ¼0) (Pe cen age o cons ain a me ) 0.24 0.43 0.61 0.49
Age (in yea s) 41.77 13.50 37.59 11.96
Educa ion (yea s o schooling) 7.41 4.83 7.52 4.62
Ma i al s a us (Single ¼1, Ma ied ¼0) (Pe cen age o single membe ) 0.16 0.48 0.26 0.45
Family membe 5.68 2.41 4.80 1.23
Male membe 2.77 1.20 2.39 0.93
Female membe 2.84 1.56 2.35 1.04
Ea ning membe 1.70 0.82 1.55 0.71
Expe ience (in yea s) 18.12 8.98 14.00 7.80
T aining (in days) 1.29 3.60 2.32 5.21
Fa m size (in decimal) 67.12 54 51.56 47
Land enu e (owned ¼1, cash enan ¼0) (Pe cen age o owne ope a ed a m) 0.75 0.44 0.55 0.50
Sou ce o seed (own ¼1, buy ¼0) (Pe cen age o own supplied seed) 0.69 0.46 0.70 0.46
O - a m income (Yes ¼1, No ¼0) (Pe cen age o posi i e esponse) 0.25 0.44 0.50 0.50
6 S. MITRA ET AL.
Fe nandez-Co nejo (2005) ound ha he scale and echnical e iciency o a ming ope a ions a e
inc eased by o - a m e enue.
3.2 Technical e iciency o c edi cons ain and uncons ain a me s
C edi is an impo an de e minan o he comme cializa ion o lowe p oduc ion. I lowe g owe s can
un hei ope a ions wi hou any so o c edi o i hey a e ge ing he necessa y c edi , hey a e said
o ha e no c edi cons ain s. On he o he hand, i a me s a e no p o ided wi h enough c edi o do
no ha e access o al e na i e sou ces o c edi , hey a e conside ed o be c edi -cons ained (Dong
e al., 2012; Fede e al., 1990; Gui kinge & Bouche , 2008). C edi -cons ained a me s ind i e y com-
plica ed o use he op imal amoun o inpu s and p oduce mo e lowe s. Table 2 demons a es he TE
and TGR o ose and ma igold a me s in Bangladesh.
The Ma igold a me s ob ain he highes mean manage ial e iciency sco e (97%) when he is no con-
s ained. I indica es ha ou pu could be inc eased by 3% wi hou inc easing inpu a he egional le el.
Unde a c edi -cons ained si ua ion, he mean manage ial e iciency is 0.77, which implies ha he e is
oom o imp o e e iciency by 23% i compa ed o he egional (g oup) on ie . The same is ue o
g owe s o oses, howe e , g owe s who ha e no c edi cons ain s ha e sligh ly highe e iciency han
g owe s who ha e c edi cons ain s. O e all, he egional p oduc ion o lowe s can be imp o ed i all
a ms can ge he necessa y c edi acili ies.
To ind ou how di e en cons ained and uncons ained a me s a e in e ms o hei mean echnical
e iciency compa ed o he bes p ac ice on ie , me a- echnical e iciency sco es (MTE) a e used. Table
2shows ha he mean me a- echnical e iciency o Ma igold a me s is highes when uncons ained
(0.73) and lowes when c edi is cons ained (0.64) ela i e o he me a- on ie , which indica es ou pu
could be inc eased by 27% and 36%, espec i ely, wi hou inc easing inpu . On he o he side, he e i-
ciency o c edi -uncons ained ose a me s is sligh ly highe han ha o cons ained ose a me s.
Gene ally, due o c edi cons ain s lowe a me s a e unable o use he op imal le el o inpu s, which
se e ely a ec s he p oduc i i y and e iciency o lowe a ms (Mi a e al., 2019; Zylbe be g, 2013).
Mi a e al. (2022) ound ha he me a- echnical e iciency o lowe a me s was he highes in no mal
ime and he lowes du ing he COVID-19 pandemic due o he g owing inpu p ice, educed inpu a ail-
abili y, and a less han op imal amoun o inpu s.
Addi ionally, he me a- echnical e iciency o ose a me s is highe han ha o ma igold a me s. The
mos p obable explana ion o he esul is ha he p o i abili y o ose a me s is highe han ma igolds
in he s udy a ea. Mo eo e , a me s end o cul i a e mo e oses, and hei a e age a m size is also sig-
ni ican ly g ea e . Highe a m size and p o i abili y may encou age inancial ins i u ions o ex end
a ou able c edi e ms o he ose a me s. On he o he hand, ma igold a me s ha e lowe a m sizes
and p o i abili y; hese si ua ions discou age inancial ins i u ions om ex ending su icien c edi acili-
ies o ma igold a me s. In addi ion, he o - a m income o ma igold a me s is highe han ha o ose
a me s, which indica es he ocus o ma igold a me s is sligh ly di e ed om ma igold a ming, which
leads o ine iciency in a ming.
Table 2 shows he mean echnological gap a io o lowe a ms in wo di e en scena ios, including
a c edi cons ain si ua ion and an uncons ained si ua ion. When gi en su icien c edi , he ma igold
a m has he g ea es TGR sco es (0.96), which means ha he a me s could gene a e 4% mo e ou pu
wi h he same inpu s and echnology compa ed o he me a- on ie . In addi ion, Ma igold achie es he
lowes TGR (0.64) when hey a e c edi -cons ained. In his case, a me s ha e he oom o p oduce 36%
Table 2. Technical e iciency and echnological gap a io ac oss a ms and g oups.
Flowe s
C edi -cons ained and
uncons ained si ua ion o
lowe a ms
Mean manage ial
e iciency (MME)
Me a echnical
e iciency (MTE)
Technological gap
a io (TGR)
Ma igold C edi cons ained a ms 0.77 0.64 0.64
C edi uncons ained
a ms
0.97 0.73 0.96
Rose C edi cons ained a ms 0.81 0.74 0.91
C edi uncons ained
a ms
0.83 0.77 0.92
COGENT ECONOMICS & FINANCE 7
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