Optimal Economic and Resource Use Efficiency Analysis of Groundnut Production in Punjab, Pakistan

Abstract

This study was carried out to investigate resource use efficiency in groundnut production and to identify and analyze groundnut production and marketing constraints in district Attock. This study was based on the primary data of 150 groundnut growers for the year 2021-22. The Cobb-Douglas production function has been carried out in the functional analysis and resource use efficiency has been used to measure the productivity of resources used in groundnut production. The results of the Cobb-Douglas production function analysis revealed that there are 64.6 percent variations in Groundnut yield collectively explained by all eight independent variables. The model obtained an F-value of 32.145, which was highly significant. The results of resource use efficiency revealed that the ratio of MVP to MFC was less than 1 for human labor X₁, machinery power X₂, transportation X₄, manures X₅, and fertilizer X₆. The ratio of MVP to MFC for farm X₃ was greater than 1 which shows the under-utilization of resources. The significant constraints of the production and marketing of groundnut are lack of adaptability of improved varieties, climate change, high input cost, no support price mechanism, limited markets, and lack of processing units, etc. On the basis of the results, the study recommends using an optimum level of inputs and using improved technology, and HYVs. Initiatives should be taken to raise the area of groundnut crops, and plant processing units and assure better support price mechanisms to achieve maximum productivity.