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

Today the society is moving towards sustainable agriculture, as a sustainable farming system, where cultivation is carried out without using chemically synthesized products such as urea, ammonium sulphate, pesticides, herbicides, hormones, activators, etc. With the introduction of organic agriculture to the world, organic tea also became important. Farmer productivity is one of the most important concerns in this regard. In the short run, the farmer productivity can be raised by improvement in technical efficiency. However, there is dearth of empirical evidence on technical efficiency of tea cultivation in Sri Lanka. Hence this article contributes to the pertinent literature by providing estimates of a stochastic frontier production model in a sample of organic tea smallholders in Diyathalawa region of Badulla district in Sri Lanka where the highest number of smallholders cultivate organic tea. The results reveal that the mean technical efficiency of organic tea smallholders is 24.7% implying that there is a scope of further increasing the output by 75.3%. Furthermore, livelihood diversification and crop diversification activities of smallholders contribute to decrease the efficiency.