A comparative analysis of technical efficiency of smallholder tobacco and maize farmers in Tabora, Tanzania.

Kidane Asmerom,Tingum Ngeh Ernest,Hu Teh Wei,Hepelwa Aloyce

doi:10.5897/jdae2014.0616

Kidane Asmerom, Tingum Ngeh Ernest + Show 2 more

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https://doi.org/10.5897/jdae2014.0616

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Abstract

The study presented here considers the relative efficiency of planting tobacco and maize in the tobacco-producing Tabora region of Tanzania. The study used a 2013 survey that was conducted among smallholder farmers in the Tabora region. The aim was to investigate whether farmers are better off planting tobacco or maize. The paper briefly reviews the importance of agriculture in general and tobacco planting in particular on the Tanzanian economy. The paper then reviews the methodology used in the analysis, The Frontier Production Function. The findings show relative inefficiency in both tobacco and maize production. When the two are compared, one finds a statistically significant higher efficiency in the production of maize compared to tobacco. In other words, maize farmers can produce the same output utilizing 76.83% of the current input, while the corresponding value for tobacco is 73.89 percent.  After generating the efficiency index of each farmer and for each crop, a multiple linear regression was estimated to identify significant determinants of efficiency. For the production of maize, five significant explanatory variables were identified (gender, age, education, household size, and farm size). For tobacco production, five explanatory variables including the variable “feeling sick while curing tobacco” were significant. In other words, the efficiency equation for maize has significantly better fit. In general, the efficiency indicators suggest that Tanzanian small scale farmers are more productive planting maize than tobacco.     Key words: Frontier, efficiency, tobacco, maize, Tanzania. &nbsp

Highlights

The agricultural sector in Tanzania plays an important role in the overall economy through its significant contributions to rural employment, food security, and provision of industrial raw materials for other sectors in the country; the performance of the overallTanzanian economy is driven by the performance of the agricultural sector (Ministry of Agriculture, Food Security and Cooperatives 2008)
The second stage of the analysis investigates farm-and farmerspecific attributes impact smallholders’ technical efficiency
The maximum likelihood estimation shows the presence of technical inefficiency effects in both tobacco and maize cultivation by smallholder farmers in Tabora region

Summary

Introduction

The agricultural sector in Tanzania plays an important role in the overall economy through its significant contributions to rural employment, food security, and provision of industrial raw materials for other sectors in the country; the performance of the overall. Tanzanian economy is driven by the performance of the agricultural sector (Ministry of Agriculture, Food Security and Cooperatives 2008). Gross Domestic Product (GDP) (World Bank, 2013, 1996, 1994, 1991). Smallholder farming dominates agricultural production, and a large proportion of that farming is for subsistence. Since poverty is predominantly a rural phenomenon, and agriculture is a major economic activity for the rural population, it follows that success in poverty reduction depends critically on the performance of the agricultural sector. The sector has achieved significant success in recent times, growing an average of 4.1% from 1998 to 2007

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