Technical efficiency of hybrid maize growers: A stochastic frontier model approach

This study investigated the effect of credit constraints and credit unconstraints on the technical efficiency of hybrid maize growers in the Khyber Pakhtunkhwa Province(KPK) of Pakistan. The primary data were collected by a direct elicitation method from 510 maize growers of KPK Province. Stochastic frontier model techniques were used for technical efficiency analyses. The results revealed that the mean technical efficiency difference between the two groups was 10.2%. The results of technical inefficiency effect modeling demonstrated that education of the household head, family size, number of married family members, off-farm income, farming experience, tractor drill, water irrigation through a lined course, certified seed, extension services, household saving variables, and a credit size variable had positive effects on technical efficiency for both credit constrained farmers(CCFs) and credit unconstrained farmers(UCCFs). In addition, age of household head and fragmented land values had negative effects on technical efficiency for both groups. However, the interest rate had positive and negative impacts on the technical efficiency of CCFs and UCCFs, respectively. Our results have significant implications for policies related to land use, interest rate, and banking sector expansion in the rural areas of Pakistan.