Environmental Efficiency of Tea Production: The Case of Uva Tea Growing Region in Sri Lanka
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Date
2020
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Publisher
Uva Wellassa University of Sri Lanka
Abstract
Sri Lanka tea industry needs to improve its productivity to remain competitive in the
international tea market. Tea producers as individual decision-making units have a greater
responsibility towards achieving and sustaining the required level of productivity. Many
factors influence the productivity of tea producers, however, production environment
characterized by the weather variables such as temperature, rainfall, and wet days are
beyond the producer’s control. The analysis of these environmental factors within a frame
of total factor productivity concept or environmental efficiency analysis captures the role
of the production environment of the producer. Surprisingly, studies on analysing
environmental efficiency as a measure of the productivity of perennial plantation
commercial crop production units are seldom in the literature. Based on a monthly panel
data from 12 different tea estates on the Uva region over 19 years (2000-2018), this study
analyses the environmental efficiency of estate level tea production. Specifically, we use
a stochastic frontier production function to reveal the total factor productivity index
(TFPI) for the selected estates over 19 years and decompose to the environmental
efficiency of the tea production. According to our findings, the environmental efficiency
scores of estate level tea production vary from 0.86 to 1.05 over the period from 2000 to
2018. More importantly, the environmental efficiency of 14 years throughout the studied
period is less than one indicating the estates of the Uva region were operating in a poor
productive environment. Our findings suggest that climate change impacts tea production
moreover, these environmental factors may also affect the production environment of tea
plantations in other tea growing regions in Sri Lanka.
Keywords: Productivity, Total Factor Productivity Index, Environmental efficiency,
Plantation
Description
Keywords
Agriculture, Tea Technology, Tea Industrial