ANALYSIS OF RESOURCE USE EFFICIENCIES AND RETURN TO SCALE OF MEDIUM SIZED BT COTTON FARMERS IN PUNJAB, PAKISTAN

This Study attempts to examine the resource use efficiency and return to scale of the medium sized Bt cotton farmers in the Punjab province of Pakistan. A sample of 150 farmers was selected through multistage sampling technique from Rahim Yar Khan, Multan and Mianwali districts for cotton season 2009. Bt cotton farmers were categorized on the basis of land holding into small, medium and large farmers. Cobb Douglas production function approach was used to measure the resource use efficiencies by calculating and comparing Marginal Value Products (MVPs) and Marginal Factor Costs (MFCs). Results depicted that ratio of MVP to MFC for fertilizer and numbers of spray were greater than 1 i.e. 1.06 and 3.19 showing under-utilization of these resources. While the ratios for irrigation water and labour i.e. 0.05 and 0.67 were less than 1 indicating over utilization of these resources. While the elasticity of production (Ep) for medium sized Bt cotton farmers was found to be 0.77 showing decreasing returns to scale. Adjustments are required in the use of resources for Bt cotton production by medium sized farmers to increase the profitability of their cotton crop. A clear cut government agricultural policy is needed to improve the profitability of the crops by providing access to information regarding best management practices.