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Diversification economies and efficiencies in a ‘blue-green revolution’ combination: a case study of prawn-carp-rice farming in the ‘gher’ system in Bangladesh

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Abstract

‘Gher’ farming is a unique system that incorporates the joint operation of three enterprises: freshwater prawn, fish and HYV rice and is expanding rapidly in the coastal regions of Bangladesh. In this paper we evaluate the performance of this unique system in terms of the existence of diversification economies (amongst the three integrated enterprises), scale economies and technical efficiency using a stochastic input distance function approach on a sample of gher farmers. The results reveal evidence of a diversification economy in the rice–carp combination. Economies of scale exist in the ‘gher’ farming system. The level of technical efficiency is estimated at 68% implying that a substantial 47% [(100−68)/68] of potential output can be recovered by removing inefficiency. Significant efficiency gains are made from diversification amongst these enterprises. Also, the education of farmers and the female labour input significantly improve efficiency whilst larger operation size reduces efficiency. The key policy implication is that the diversification of enterprises, particularly the rice–carp combination, is beneficial and should be promoted. Also investment in education and creation of a hired labour market for females would improve technical efficiency.

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Notes

  1. The term ‘shrimp’ is used for species in the family penaeidae.

  2. Technical efficiency is defined as the ability of a firm to obtain maximum possible output from a given set of inputs.

  3. The term ‘diversification’ here refers to the allocation of resources to a variety of enterprises, the outcome of which are not closely related (Coelli and Fleming 2004). In this sense, economies of diversification or diversification economies exist if a particular firm can produce two outputs by allocating relatively less resources than two separate firms specializing in the production of two individual outputs would require.

  4. Bilpabla village was selected purposively because the farmers have long years of experience of the ‘gher’ farming system.

  5. Coelli and Fleming (2004) applied a more restrictive translog specification allowing for only output interactions (presumably to preserve degrees of freedom) and called it a (partial) translog model.

  6. Scale economies exist if a firm can produce a proportionately higher level of output relative to input proportions as firm size expands.

  7. Brackish water shrimp farming is also produced within a ‘gher’ system, where the associated enterprise is salt farming (sea-salt to be precise).

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Authors and Affiliations

  1. School of Geography, Earth and Environmental Sciences, University of Plymouth, Drake Circus, Plymouth, PL4 8AA, UK

    Sanzidur Rahman

  2. Department of Economics, East West University, Dhaka, Bangladesh

    Basanta K. Barmon

  3. Department of Fisheries Management, Bangladesh Agricultural University, Mymensingh, Bangladesh

    Nesar Ahmed

Authors
  1. Sanzidur Rahman
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  2. Basanta K. Barmon
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  3. Nesar Ahmed
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Correspondence to Sanzidur Rahman.

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Rahman, S., Barmon, B.K. & Ahmed, N. Diversification economies and efficiencies in a ‘blue-green revolution’ combination: a case study of prawn-carp-rice farming in the ‘gher’ system in Bangladesh. Aquacult Int 19, 665–682 (2011). https://doi.org/10.1007/s10499-010-9382-z

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