Profit Efficiency of Smallholder Pig Farmers in Tharaka-Nithi County, Kenya

Pauline Kananu Micheni ,Newton Nyairo ,Nigat Bekele ,Geoffrey K Kosgei

doi:10.7176/jesd/11-10-16

Abstract

The aim of this study was to determine the profit efficiency of the smallholder pig farmers in Tharaka-Nithi County, Kenya. The study carried out a census of 80 smallholder pig farmers. The data was collected with the help of semi-structured interview schedule. The study found out that five farms had profit efficiency score of 1 thus they were efficient while the rest were inefficient. The most inefficient farm had inefficiency level of 0.005, thus had to reduce input costs by 99.5% in order to acquire its target value. The mean profit efficiency results were 40% implying that efficiency level could be increased by 60% through reducing the excess inputs used and better use of available resources. This would be acquired if good management practices and marketing channels are adopted. The average input slack value of 1208 which means farmers had a chance of reducing their input costs by this amount per year without compromising their output. Benchmarks can be established from the best practices farms which can be used as a package for enhancing and stabilizing profit efficiencies of smallholder pig farmers which in turn could help improve the Kenya economy. The study also recommends policy interventions pertaining to pig enterprise inputs, marketing issues and financial products in order to improve pig farmers’ livelihoods. Keywords: Small Holder Farmers, Profit Efficiency, Data Envelopment Analysis, Decision Making Unit DOI: 10.7176/JESD/11-10-16 Publication date: May 31 st 2020

Highlights

The pig industry in Tharaka Nithi County, Kenya is mainly dominated by smallholder farmers (SHFs) like other agricultural sub sectors
Data Envelopment Analysis (DEA) model was run with factors of production and marketing costs as inputs and the farm profits as the output to give us the profit efficiency rankings of the farms
The results reveal that each smallholder pig farmer had a chance of reducing input costs by this amount per year without compromising their profit levels

Summary

Introduction

The pig industry in Tharaka Nithi County, Kenya is mainly dominated by smallholder farmers (SHFs) like other agricultural sub sectors. Several factors such as suitable climate, less land required, quick returns on investments due to large litter size and faster maturity rate contribute to success of pig production by smallholders. Quality inputs, reliable and efficient markets, credit access and favorable policies have been identified as crucial to improve productivity. The SHFs are not well organized and do not command a voice that can facilitate their access to appropriate services with a unified voice. SHFs lack a business orientation, meaning they do not operate their farming enterprise as a business (Mutua et al, 2010)

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Conclusion