Technical Efficiency of Shrimp and Prawn Farming: Evidence from Coastal Region of Bangladesh

Shrimp and prawn farming in Bangladesh have experienced spectacular growth in response to expanding global demand and higher economic return. In 2011, 180 shrimp and prawn farms were surveyed in Bangladesh to estimate their production efficiency and determine factors affecting the efficiency level. The results show that there are substantial inefficiencies among shrimp and prawn farms. The technical efficiency ranges from 55% to 97% (Mean±SD: 88±9%) for shrimp farms and from 39.56% to 99.79% (72.41±16%) for prawn farms, suggesting that shrimp and prawn farms could increase their output by 12% and 27.59%, respectively. For a land scarce country like Bangladesh this gain could increase income and ensure better livelihood for farmers. The results of the stochastic production frontier approach indicate that farmers could operate at an optimal scale for increasing their product. Farmers’ education, training, age and water quality significantly affect efficiency.