Income, productivity and labor utilization on (MV and TV) rice farms in Chitwon District, Nepal
Date
1980-10
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Abstract
This study examines and analyzes (a) the relationship between output and inputs in the production of modern and traditional varieties (MV and TV) of rice, (b) the per hectare costs, revenues and labor utilization on MV and TV rice farms, and (c) the factors affecting demand for labor on these farms.
Analysis of the fitted Cobb-Douglas production function indicates positive coefficients for human labor, capital expenses, nitrogen, and negative but insignificant coefficients for bullock labor in both MV and TV rice farms. Moreover MV farms were shown to operate on a higher level of technology as compared to TV farms.
Marginal analysis confirms that human labor is the most productive and bullock labor is the least productive for both MV and TV cultivation. It also reveals that both farms inefficiently allocate inputs.
Income and expenditure analysis asserts that MV cultivation is much more profitable, wherein a 22 percent increase in per hectare costs generates an increase in net income per hectare exceeding that on TV farms, by 84 percent. The statistical t-test verifies that per hectare yield, cost and income are significantly higher for MV than for TV rice farms.
Analysis of labor utilization shows that the shift from MV to TV rice cultivation implies a significant 16 percent increase in per hectare labor use, a 74 percent increase in used of hired labor and a 28 percent decline in the use of family labor; labor use per ton of rice decreased however indicating higher labor productivity on MV rice farms. Output share of hired labor is also greater on MV than on TV rice farms.
Finally, analysis of the factors affecting demand for labor shows working capital as having a significantly positive effect, while the wage rate is inversely related to demand for labor. The regression further reveals that the prices of output and tractors are positively related to labor demand while negative coefficients relate family size.
Policy implications from the study indicate that the shift to MV rice cultivation should be actively supported by government by way of a packaged program which includes credit facilities, extension services, and access to supply of modern inputs and technical knowhow. The success of this program would mean a better standard of living for the people, as incomes rise and employment opportunities are opened, and a much needed expansion in rice production.