Economics of Cotton Production: Studying Cost and Profit Efficiency of Cotton Farmers in Boshrouyeh

Abstract

Cotton as a strategic product plays an important role inthe economy of Boshrouyehwhere is known as the major cotton producing center of Khorasan-e-Jonoubi. In this paper, efficiency of Boshroyeh cotton farms in 2007 have been calculated using Data Envelopment Analysis (DEA) and determinants of efficiency were identified using Tobit regression analysis. The data was collected from questionnaires filled in by 65 Cotton farmers in Boshrouyeh who were distributed in three groups. According to the DEA results, averages of technical, allocative, cost and profit efficiency scores were measured by0.86, 0.80, 0.70 and 0.43, respectively. Tobit regression estimates indicate that incoming water flow to farms and farm size has positive and significant impact on the economic efficiency, while numbers of spraying significantly reduces the economic efficiency. Education does not havea significant impact on the economic efficiency.Ultimately, the study suggests land consolidation, training and technology transfer to provide appropriate conditions to produce cotton, efficiently