Profit efficiency among kenyan maize farmers

Abstract

The profit efficiency (PE) of maize farming and its determinants are estimated using the true random effect (TRE) approach. A survey of maize farmers was conducted in Uasin Gishu, one of Kenya's top maize-producing regions. Clearly, maize farmers can increase their profits based on the mean PE of 0.62. In terms of profitability, maize farming is elastically affected by the price of maize, but inelastically affected by the price of inputs. In households where the head of household is male, household sizes are larger, and farm sizes are larger, inefficiencies of profit are significantly reduced. Despite this, factors such as the distance between home and the maize farm, soil characteristics, maize diseases, along with natural disasters significantly increase profit inefficiency. According to the findings of the study, maize prices are more effective targets for developing supportive policies than input prices. To significantly increase PE, farmers would benefit from programs designed to improve their production and management skills to preserve soil health and minimize damage caused by disease and natural disasters. Furthermore, increase in PE would be achieved by improving farm size through land-use policies.