Assessing technical efficiency in ginger production using the Stochastic Frontier Approach

Ginger (Zingiber officinale) is an economically significant spice crop cultivated across the mid-hill regions of Nepal. Despite its importance, the production system remains inefficient, and empirical evidence on the extent and causes of this inefficiency is limited. This study evaluates the technical efficiency of ginger producers and identifies the factors contributing to inefficiency. Primary data were collected from 80 ginger farmers in the Salyan district of Nepal. A Stochastic Frontier Approach (SFA) was applied using STATA 14.0 to estimate technical efficiency scores and determine the socioeconomic and institutional factors influencing inefficiency. The findings revealed that the average technical efficiency of farmers was 74.5%, indicating that output could be increased by approximately 25.5% with better use of existing resources. Farmyard manure (FYM) had a positive and highly significant effect on output (p < 0.01), whereas the quantity of rhizome used showed a negative effect (p < 0.10), highlighting that yield gains depend more on quality planting material than volume. Furthermore, education, training, access to credit, subsidies, and cooperative membership significantly reduced inefficiency (p < 0.01). Farmers identified rhizome rot and low market prices as major production constraints for ginger production. Overall, these findings underscore the need to enhance input quality management and strengthen farmer support services to improve technical efficiency in ginger production in the study area.