Technical Efficiency of Shrimp Farming in Bangladesh: An Application of the Stochastic Production Frontier Approach

This study estimates the levels and determinants of farm‐level technical efficiency of shrimp farmers, using the stochastic production frontier function involving a model for technical inefficiency effects. A sample of 90 brackish water shrimp farms were surveyed in the region of Shyamnagar Upazila of the Satkhira District, Bangladesh, to study their economic efficiencies. Data were collected, using a questionnaire survey from September to October 2011. The mean technical efficiency level of the shrimp farmers was estimated at 82%, and thus, farmers operate 18% below the production frontier. The results suggest that the inefficiency effect is significant, and that education, age, non‐farm income and distance of the farm are significant determinants of technical inefficiency. By operating at full technical efficiency levels, shrimp production can increase from the current yield of 225.56 to 265.28 kg/ha. Besides improving technical efficiency, technological progress and extension services (such as dissemination of proper information of the technological practices and further adoption of technological practices) can also contribute to increased shrimp production levels. Finally, quality feed and fingerling at affordable prices need to be ensured to further promote shrimp production.