Farm diversity and resource use efficiency: Targeting agricultural policy interventions in East Africa farming systems

Abstract

This paper aimed to provide empirical evidence on the links between farm diversity and resource use efficiency. Using farm typology and stochastic production frontier approaches, we grouped households into those pursuing similar livelihood strategies and assessed their resource use efficiency. At 60% coefficient of similarity, we identified three distinct farm types – Farm-specialised, Diversified and Off-farm specialised. Significant (p<0.01) differences across farm types were observed for, the proportion of income from farming, farmed area, and land use patterns, confirming these as good indicators for distinguishing between farm types. Over 50% of surveyed households were categorised as Diversified and Off-farm specialised, and mainly pursued off-farm livelihood strategies. Farm-specialised households pursued mainly farm-based activities and earned higher net incomes compared to other farm types. However, they exhibited technical inefficiency in the use of labour and fertiliser compared to other farm types. Access to extension and commercial orientation showed significant (p<0.01) positive effect on technical efficiency for Farm-specialised households. Results have implications for policies and programmes aimed at improving agricultural productivity. There is need to focus support on interventions that make a significant contribution to farm efficiency, in particular, extension services and market access. Agricultural programmes are likely to be successful if they are targeted to households reliant on agriculture, while, off-farm households could be oriented towards off-farm agri-enterprises such as processing and marketing.