Abstract

The aim of the study was to determine the farm level technical efficiency and its determinants among smallholder sugarcane farmers in Malava Sub-county, Western Kenya. Primary data were collected using questionnaires from a sample of 384 farmers through systematic random sampling.  The study applied stochastic frontier analysis and Tobit regression analysis using computer software STATA. The results found that technical efficiency of sugarcane farmers ranges from almost zero to 0.9829, with mean value of 0.7069, implying that an average farmer could increase sugarcane productivity by 29.31% at the existing level of resources. Maximum likelihood estimate of technical efficiency depicted that the use of fertilizer, labour, seed-cane and farm size are positive and significant at 1% level in determining technical efficiency. Tobit regression analysis showed that education, farming experience, family size, credit access and extension services were positive and significant in contributing to technical efficiency. However, age of the farmer, farm distance from home and contract engagement was negatively influencing technical efficiency. The study recommends the Kenyan government to formulate policies that ensure provision of quality extension services, increased credit access and education among smallholder sugarcane farmers. The results also recommended the need for a review of the existing contract engagement policies among sugarcane farmers. Key words: Technical efficiency, stochastic frontier analysis, tobit, sugarcane. &nbsp

Highlights

  • Sugarcane (Saccharum officinarum) is one of the major crops grown in the world due to its multiple uses in daily life of any nation including nutritional and economic sustenance

  • The results of this study showed that smallholder sugarcane farmers are inefficient with a mean technical efficiency of 0.7069

  • The maximum likelihood estimates indicated that fertilizer, labour, seed-cane and farm size make significant contribution in improving the productivity of sugarcane among smallholder farmers

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Summary

Introduction

Sugarcane (Saccharum officinarum) is one of the major crops grown in the world due to its multiple uses in daily life of any nation including nutritional and economic sustenance. Sugarcane contributes to about 80% of the total sugar produced in the world (Rumánková and Smutka, 2013). Brazil is the largest producer of sugarcane in the world with an annual production of about 768,678,382 metric tonnes which is followed by India that produces 348, 448,000 metric tonnes per year (FAOSTAT, 2016). Technical efficiency and profitability of potato production by smallholder farmers: The case of Dinsho District, Bale Zone of Ethiopia. Estimation Methodology of Economic Efficiency: Stochastic Frontier Analysis vs Data Envelopment Analysis

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