Abstract
Dairy value chain has an important role in income generation and provision of employment. The latest trends in demand for dairy products is progressively exceeding the supply in the Rwanda and in Nyanza district particularly; this constitute a genesis of discussion and analysis of dairy production situation. Smallholder dairy farming is practiced in Rwanda aiming at generating income and nutrients in households; however, the efficiency in smallholder dairy farming is highly disputed. This study examined factors affecting technical efficiency of smallholder dairy farmers in Nyanza District with estimation of the marginal gross profit of smallholder dairy production. Stratified random sampling was adopted to determine the respondents. Primary data were drawn from 110 smallholder farmers using structured questionnaires. Non-parametric approach, Gross margin and Stochastic Frontier were employed. The results revealed that socio-economic factors and institutional factors directly affects technical efficiency of smallholder dairy production. The study will help the government and smallholder dairy farmers in organizing themselves in groups for bulk purchases of inputs during high season this will end up reducing unnecessary cost of transporting and price increase of inputs during low season hence increasing milk production Key words: smallholder dairy farming, stochastic frontier, Technical efficiency, Nyanza District, Rwanda DOI: 10.7176/EJBM/12-8-03 Publication date: March 31 st 2020
Highlights
1.1 Background of the Study In Rwanda agriculture is the main economic activity practiced by over 80% of the country labour force (NISR, 2015)
When technical efficiency is examined according to the herd size the results shows that smallholder dairy farmers with herd size of 1 and 2 cows, all have the same mean efficiency of 68% while smallholder dairy farmers with herd size of 3 and 4 cows have mean technical efficiency of 75% and 99% respectively
In the findings it was established that socio-economic factors and institutional factors affects technical efficiency of smallholder dairy production
Summary
1.1 Background of the Study In Rwanda agriculture is the main economic activity practiced by over 80% of the country labour force (NISR, 2015). Despite several researches conducted on various facets of Rwanda dairy sub-sector, there is absence of study conducted in dairy sub-sector to look on production efficiency to determine primarily the ability of dairy smallholder farmers to produce on their maximum and if dairy smallholder farmers have the ability to produce a given level of output using the cost minimizing inputs ratio. This constitutes a gap to the Government policy such as zero grazing in cattle farming and the increase in number of cows owned by smallholder farmers through GIRINKA. The findings will enable policy makers to understand areas which should be improved so as to increase efficiency of dairy sub-sector
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