Total factor productivity growth in livestock production in Botswana: what is the role of scale and mix efficiency change in beef production?

Abstract

ABSTRACT It is well established that improving livestock productivity has the potential to boost food security, income, and employment for rural communities. While the technical efficiency of the livestock sector has been extensively studied in both developing and developed countries, few studies have analysed total factor productivity (TFP) and its components (technical change, technical, scale, and mix efficiency changes). To fill this gap this study specifically analyses the TFP growth of 26 beef cattle producing districts in Botswana using the Färe-Primont index. This index does not only allow us to understand how TFP varies amongst the districts but also how it has changed over time (between 2007 and 2014) as well as examining what has been driving that change. We also employ a feasible generalised least squares estimator for panel data to identify sources of productivity and efficiency growth. Results show that livestock TFP increased during the study period, and that this was driven by technological change, whilst efficiency change (TFPE) decreased. Further, we found that the decline in scale-and mix efficiency change (OSME) was largely responsible for the slowdown of TFPE, with a relatively smaller decline in technical efficiency change (OTE) also contributing. Districts with foot and mouth disease (FMD) outbreaks and restricted access to export markets had lower TFP growth whilst proximity to livestock advisory centres (LAC), off-farm income, education and herd size were shown to enhance productivity and efficiency growth.