Stochastic frontier approach to measuring irrigation performance: An application to rice production under the two systems in the Tarai of Nepal

This study employs the stochastic frontier production function approach to measuring the productive performance of canal irrigation in terms of farm-s pecific technical efficiency. The 1993 production data from samples of rice farmers from Khageri (government managed) and Pithuwa (farmer managed) irr igation systems in the Tarai of Nepal were analyzed using a stochastic prod uction frontier, including a model for the technical inefficiency effects. Relative both to a common or pooled production frontier for the two systems and a separate or own frontier for each system, on average, the farmers fr om the farmer-managed system were found to be more efficient than those fro m the government system. Furthermore, the government system showed higher s patial variability in technical efficiency in rice production than the farm er-managed one, which suggests that irrigation management has a significant influence on production and hence on the distribution of productivity gain s among the farmers. However, better performance of the farmer-managed Irri gation system relative to the government system should be weighed against t he higher transaction costs associated with irrigation management by farmer s. The results indicate that substantial potential exists for increasing ri ce production by increasing the application of chemical fertilizer, the pla nting of seed, and the use of irrigation and by improving technical efficie ncy at the farm level.