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Pakistan is one of the major cotton producing country of the world while per acre yield is lower as compared to others cotton producing countries. According to prevailing conditions, different factors are involved in low per acre yield. Study based to estimate the technical efficiency of cotton farmers in the Southern Punjab of Pakistan namely the two districts Rahim Yar Khan and Muzaffargarh. Data was collected from 450 farmers (225 farmers to each district) for the crop year 2010-11. Technical efficiency was estimated through stochastic frontier production function procedure. The mean technical efficiency of district Rahim Yar Khan is 0.86 which ranges to 0.16 to 0.96 while the mean technical efficiency of district Muzaffargarh is 0.76 which ranges to 0.32 to 0.98. Results of study points out farmers of district Rahim Yar Khan could increase their production 0.14 through using the prevailing resources efficiently and farmers of district Muzaffargarh could increase their production 0.24 through using the prevailing resources efficiently. It points out that a wide gap is prevailing in the both districts which could be achieved through the efficiently using the prevailing resources. Production elasticity estimates indicate that planted area, seed, nitrogen fertilizer, phosphorus fertilizer, family labor and irrigation play the significant role in the cotton production in both districts. Pesticides positively effects in cotton production of district Rahim Yar Khan due to proper quality and quantity use according to recommended level while pesticides having the adverse effect on cotton production in district Muzaffargarh due to poor quality and over dose of spraying. Determinants of technical inefficiency age reduce the technical inefficiency in district Rahim Yar Khan while it increases the technical inefficiency in Muzaffargarh. The reason lying that aged farmers in Rahim Yar Khan are more efficient than young farmers are because they are experienced, familiar with new inventions in cultivations and willing to adopting such changes while the aged farmers in Muzaffargarh are conservative minded and limited to outdated traditional methods of cultivation. Education, family size, facility of credit, own tubewell, contact to agriculture extension and sowing seed timely reduces the technical inefficiency in both districts. Farm size and tenancy status owner cultivation increases inefficiency of farmers in Rahim Yar Khan while it decreases the inefficiency in Muzaffargarh. Large farm size causes the management problems to owners so it negatively effects the cotton production in Rahim Yar Khan while the farm size not much larger in Muzaffargarh and owners having no management problems. Canal water shortage increases the technical inefficiency in both districts. Cotton production could be increased through development of modern technology and efficient use of available resources.
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