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Economics Research International
Volume 2012 (2012), Article ID 781581, 17 pages
http://dx.doi.org/10.1155/2012/781581
Research Article

Measuring the Performance of River Basins: Application of Total Factor Productivity Approach to Andhra Pradesh, India

1International Water Management Institute (IWMI), ICRISAT Campus, Patancheru 502324, Hyderabad, India
2Department of Physical Sciences and Information Technology, Tamil Nadu Agricultural University, Coimbatore 641003, India

Received 31 March 2012; Accepted 29 May 2012

Academic Editor: Thomas D. Crocker

Copyright © 2012 K. Palanisami and C. R. Ranganathan. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Total Factor Productivity (TFP) measures the growth in output which is not accounted for by inputs. Data Envelopment Analysis which forms the basis for the computation of Malmquist TFP index is used in this paper to study the performance of different river basins in Andhra Pradesh state, India. The results indicated that average technical efficiency of all the basins is only 66%. In all the basins there was a decline in growth of agricultural output during the first two decades, viz., 1979-1980 to 1988-1989 and it had picked in the last decade (1999-2000). All the river basins have TFP change greater than 1 indicating progress in agricultural productivity. Out of the 40 river basins, 14 river basins have technical efficiency change less than 1 indicating decline in TFP growth whereas all the basins have technical changes greater than 1 implying that there is shift in production frontier over years. In general, within the TFP, technical change contributed more than technical efficiency change. Looking at the future options for increasing the agricultural output in the river basins, it is important to focus on improving the TFP growth compared to increasing the quantities of physical inputs.