Households living in peripheral villages of the natural forests are primarily dependent on
agriculture and secondarily dependent on forest gatherings. High rates of forest
dependency occur, in part, from the efforts of inefficient farmers securing subsistence.
Due to excessive use, the productivity of the remaining forests is at a critical stage.
Technical efficiency in agriculture in forest peripheries is one aspect in which agricultural
capacity and rural incomes can be enhanced. The study’s main objective was to assess the
efficiency of farming in forest margins and to determine its effect on dependency on
forest resources by rural households.
The findings of the study showed that the mean technical efficiency in agricultural
farming in forest peripheries ranges between 67 – 73 percent. Factors such as age,
education, experience, extension, and the nutrition status of the household head are
mainly responsible for determining the level of inefficiency. Further, study findings
showed factors such as technical efficiency in agriculture, off-farm income, wealth and
the diversification index had negative and significant effects on dependency of rural
households on forest resource extraction. It is estimated that on average, an increase in
mean technical efficiency in agriculture by 10 percent would increase agricultural
revenue by 2,142 – 3,987 rupees/farm. Based on the threshold efficiency levels needed to
arrest forest dependency, it is estimated that increasing agricultural income through
increasing technical efficiency can be partly compensated for forest resource extraction.
Compared to the measured efficiency levels, the efficiency gaps needs to be addressed by
policy measures range from 2-14 percent for NTFP categories and 10-26 percent for the
fuelwood category. Technical efficiency in agriculture can be minimized via policies to
enhance farmer education, extension and nutrition status of households.