Technical efficiency of organic tea smallholders: evidence from Uva region of Sri Lanka

Abstract

Today, the society is moving to the sustainable agriculture where the major concern of the consumers are health benefits and environment pollution. Therefore, the production of organic tea plays a major role in tea industry. In Uva region, the highest number of organic tea smallholders are in Diyathalawa and their productivity is varied from farmer to farmer and therefore, necessity of how to maximize the productivity arises. Hence, this research aims to find the determinants of the technical efficiency of the organic tea smallholders. Data were collected from organic tea smallholders in Diyathalwa using stratified random sampling method. The data were analyzed using stochastic frontier production model. The results suggest that mean technical efficiency of organic tea smallholders is 24.7%. Most importantly, the efficiency of organic tea production increases when tea smallholders are educated and young. The results further reveal that efficiency in organic tea production reduces if the tea smallholders diversify their crop cultivation and engage in livestock management.