Exploring the Seasonal Yield Variability, Production Risk and Efficiency : The Case of Rice Farms in Bangladesh

Farmers in developing countries like Bangladesh face different kinds of rice production risk, which influences yield variability. This study investigates the technical efficiency and production risk of Boro and Aman rice production season in Bangladesh by using stochastic production frontier assuming true random effect (TRE) model with flexible risk properties using two-year seasonal plot-level panel data of 5684 observations for Boro rice and 5124 observation for Aman rice. The empirical result of risk model shows that labor, fertilizer, irrigation, seed and farm capital have significant risk-decreasing effect while cultivated area of rice and average mean temperature have significant risk-increasing effect on Boro rice. Labour and pesticide have significant risk-decreasing effect where, fertilizer has significant risk-increasing effect on Aman rice production. The mean TE score is 76% and 71% for Boro and Aman rice, respectively, suggesting that an average farmer could increase rice yield by 24% and 29% by improving technical management without increasing existing inputs level. This study also found that the farmers in western region are 37% and 22% more efficient than the south-eastern region for Boro and Aman rice production, respectively. Large farms are higher technically efficient than other farm categories. This paper highlights that small farms and medium farms significantly decrease technical efficiency for Boro rice while significantly increasing for Aman rice. Moreover, technical efficiency is declined over time for Boro rice while improved over time for Aman rice in Bangladesh. However, production risk is declined over time for both Boro and Aman rice