Determinants of Total Factor Productivity and Efficiency of Small Holder Farmers in Sri Lanka: A Färe-Primont Index Approach

Objectives of this study are to estimate the decompositions of total factor productivity and its influencing factors among paddy farming in Mullaitivu district, Sri Lanka. Multistage sampling technique was used to collect the data from six villages and finally total sample of 120 farmers used as a sample. The output and inputs data on paddy farming were collected through questionnaire for the period 2019/2020 and using these data, decompositions of total factor productivity among paddy farming were measured in terms of Färe-Primont index in the study.

The frequency of efficiency components reveals that nearly 38% of the farmers attained less than 50% in total factor productivity while only 11% of them attained between 50% and 70% in total factor productive efficiency.  The overall average found to be .629 and the mean total factor found to be .458. Significant factors have been identified through the Tobit model. Result indicated that quality of land, farm income, amount of saving, amount of loan and ownership of land determines the total factor productivity, total factor productive efficiency and input-oriented scale mix efficiency. But, availability of training and farm income were the major drivers of output scale efficiency in the study.