The Effects of Market Reform on Cotton Production Efficiency. The Case of Tajikistan.

This study examines the effects of market reform on the agriculture sector of Tajikistan. It investigates the level and determinants of technical efficiency for a sample of cotton growing regions in Tajikistan. Using unbalanced panel data of 11 years covering the transition period 1992-2002, 34 cotton-producing regions are analysed with a translog stochastic production frontier, including a model for regional-specific technical inefficiencies. The output elasticities, marginal productivities of inputs, returns to scale, and indices of convergence are also examined. They reveal that the technical inefficiency effects are found to be highly significant in indicating the ranges and variation in regional outputs. The results show that market reforms had a significant positive impact on technical efficiency of cotton production, which, in turn, has a substantial contribution to the process of economic development of Tajikistan.