Technical- and Environmental-Efficiency Analysis of Irrigated Cotton-Cropping Systems in Punjab, Pakistan Using Data Envelopment Analysis

Cotton cropping in Pakistan uses substantial quantities of resources and adversely affects the environment with pollutants from the inputs, particularly pesticides. A question remains regarding to what extent the reduction of such environmental impact is possible without compromising the farmers’ income. This paper investigates the environmental, technical, and economic performances of selected irrigated cotton-cropping systems in Punjab to quantify the sustainability of cotton farming and reveal options for improvement. Using mostly primary data, our study quantifies the technical, cost, and environmental efficiencies of different farm sizes. A set of indicators has been computed to reflect these three domains of efficiency using the data envelopment analysis technique. The results indicate that farmers are broadly environmentally inefficient; which primarily results from poor technical inefficiency. Based on an improved input mix, the average potential environmental impact reduction for small, medium, and large farms is 9, 13, and 11 %, respectively, without compromising the economic return. Moreover, the differences in technical, cost, and environmental efficiencies between small and medium and small and large farm sizes were statistically significant. The second-stage regression analysis identifies that the entire farm size significantly affects the efficiencies, whereas exposure to extension and training has positive effects, and the sowing methods significantly affect the technical and environmental efficiencies. Paradoxically, the formal education level is determined to affect the efficiencies negatively. This paper discusses policy interventions that can improve the technical efficiency to ultimately increase the environmental efficiency and reduce the farmers’ operating costs.