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Research Article

JCR. 2020; 7(7): 1734-1750

Measurement of Total Factor Productivity of Agro-Food Processing Firms in Northern India

Abid Sultan, Arshad Bhat.

Based Malmquist Productivity Index (MPI), the present study estimates total factor productivity
(TFP) of agro-food processing units of northern states of India for the period 2008-09 to 2016-17.
The study measures TFP using two input variable i.e. labor & capital and has used Gross Value
Added (GVA) as an output variable. TFP has been measured both at the aggregate and disaggregate
levels in the selected states. At disaggregate levels, four segments of the agro-food processing
industry have been studied. The result of the present study reveals that all the studied agro-food
processing firms operating in the north Indian states are under productivity regress during the
entire period of the study. The main reason of this regress is technical inefficiency. Productivity
regress has been also observed in each of the studied segment. The results of the study can be
constructive in developing & implementing technical interventions for accelerating productivity
growth as per the National Manufacturing Policy (NMP) of 2011. At the firm level, the study can
help agro-food processing entrepreneurs in understanding the strategic significance of the technical
efficiency and how it can change competition & growth landscape.

Key words: Technical efficiency, Total Factor Productivity, Malmquist Productivity Index, DEA

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