Determination of Cost Efficiency Level of Production among Sugarcane Farmers in Nyanza Region, Kenya

Benjack Otieno Ochieng ,Scholastica A Odhiambo ,Destaings Nyongesa

doi:10.7176/jesd/11-16-08

Abstract

In agricultural production, labour, capital and land are critical ingredients in increasing output levels. In sugarcane and food crops production, farmers always experience competing requirements on production inputs. In Kenya, farmers are uprooting sugarcane to compensate for food deficits without due regard to the possibility that these two crops can coexist in case production inputs are in short supply. Based on production theory, this study established the cost efficiency level and the possible likelihoods sugarcane farmers, in Nyanza region, can make given the production inputs. Cross sectional data and Stratified random sampling was used. Stochastic Frontier and Multinomial Logit regressions obtained the results which showed that sugarcane farmers were cost inefficient; the significant determinant of choices that farmers make were the cost of labour and the cost of land. However, they were positive and negative respectively. This paper recommended for the betterment of wages and cost of land controls if efficiency and sugarcane output is to be increased. Keywords : Cost efficiency, Sugarcane, Food Security, Farmers DOI: 10.7176/JESD/11-16-08 Publication date: August 31 st 2020

Highlights

A critical factor that determines an enterprise level of competitiveness, whether big or small is the level of efficiency which can be classified into cost, technical or allocative efficiencies
In the context of this paper, the study area comprised of sugarcane growing counties in Nyanza region, Kenya namely Kisumu, Homabay and Migori and the study focused only on sugarcane farmers who either dealt with sugarcane “only”, or mixed farming i.e. sugarcane and food crops and investigated the sole factors of production namely labour (Narayan, 2004); capital (FAO, 2008) and land (Watson, Garland, Purchase, Dercas, Griffee, & Johnson, 2008)
Based upon the aforementioned debates, this paper investigated, in terms of the factor inputs; the probable reasons regarding the inclination towards sugarcane “only” farming or mixed farming

Summary

Introduction

A critical factor that determines an enterprise level of competitiveness, whether big or small is the level of efficiency which can be classified into cost, technical or allocative efficiencies. Once farmers have struggle to acquire these inputs, and given the myriad problems facing the sugarcane farmers, Africa Times, (2015), attempts are made by the said farmers to practice mixed farming in order to mitigate the adverse effects of sugarcane productivity, (Farmbiz Africa, 2018) Supporting this opinion was Monroy, Mulinge, & Witwe, (2012) who contended that sugar industry in Kenya cannot meet national demand or even compete with other producers in the international market because of cost inefficiencies in the region. 3. Methodology This paper used correlational research design adopted and adopted Stochastic Frontier Analysis and Multinomial Logistic Regression to establish the cost efficiency level and likelihood effects the factors of production had upon the various agricultural practices among farmers in Nyanza region, Kenya.

Farm inputs on Crop or farmer type choice

Findings

Conclusion and Recommendations