Assessing Production Efficiency by Farm Size in Rwanda: A Zero-inefficiency Stochastic Frontier Approach

2020 ◽  
Author(s):  
Jules Ngango ◽  
Seungjee Hong
Keyword(s):  
Technical Efficiency ◽  
Production Efficiency ◽  
Stochastic Frontier ◽  
Sub Saharan Africa ◽  
Farm Size ◽  
Farm Income ◽  
Maize Production ◽  
Positive Effects ◽  
Study Results ◽  
The Relationship

Abstract This study investigates the relationship between farm size and technical efficiency for maize production in Rwanda. Since levels of technical efficiency tend to vary considerably across farms in sub-Saharan Africa, with a mixture of both inefficient and fully efficient farms, the use of the conventional stochastic frontier method is not appropriate. In this paper, we apply a zero-inefficiency stochastic frontier method that manages both efficiency and inefficiency in the studied sample. The average technical efficiency of maize farms for the full sample is estimated at 0.64, demonstrating that maize output can be improved by approximately 36% without increasing the proportion of farm inputs used. Regarding the relationship between farm size and technical efficiency, the study results show a positive relationship between farm size and technical efficiency for maize production in Rwanda. Thus, the enforcement of land reforms such as land consolidation and enhanced aggregate productivity growth are needed. The results also indicate that education, cooperative membership, extension services, access to credit, off-farm income, land tenure, and livestock ownership have significant and positive effects on technical efficiency.

scholarly journals Technical Efficiency and Small Scale Maize Producers in Mwanza Region: A Stochastic Frontier Analysis

2021 ◽  
Vol 9 (3) ◽  
Author(s):  
Mukole Kongolo
Keyword(s):  
Technical Efficiency ◽  
Best Practice ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Likelihood Estimation ◽  
Estimation Procedure ◽  
Farm Size ◽  
Small Scale ◽  
Maize Production ◽  
Frontier Analysis

This study measured technical efficiency and its determinants in maize production by small-scale producers in Mwanza region, using a stochastic frontier production function approach. A randomly selected sample of participants in the two districts was used. The Maximum Likelihood estimation procedure was followed to obtain the determinants of technical efficiency and technical efficiency levels of small-scale maize producers. The minimum and maximum values of technical efficiency were between 20% and 91%, indicating that the least practices of specific producer operates at a minimum level of 20%, while the best practice producers  operate  at 91% technical efficiency  level respectively. The summary results of the mean technical efficiency was 63%. The main determinants of technical efficiency were labour, farm size, producer’s experience, producer’s age, family size which were all positive and statistically significant. The findings suggest that the average efficiency of small-scale maize producers could be improved by 37% through better use of existing resources and technology. These findings highlight the need for action by government to assist small-scale maize producers improve efficiency.

scholarly journals Analysis of technical efficiency in maize production in Guji Zone: stochastic frontier model

2020 ◽  
Vol 9 (1) ◽  
Author(s):  
Aschalew Shiferaw Belete
Keyword(s):  
Maximum Likelihood ◽  
Technical Efficiency ◽  
Stochastic Frontier ◽  
Maize Yield ◽  
National Average ◽  
Likelihood Method ◽  
Farm Income ◽  
Total Production ◽  
Maize Production ◽  
Truncated Normal

Abstract Background The Guji Zone in particular and Oromia region in general have a huge potential for crop production that can even contribute for the country as a whole in the struggle for achieving food security. Maize is Ethiopia’s largest cereal crop in terms of total production, acreage, and the number of farm holdings. It is one of the staple crops produced in the study area. However, the farm productivity per hectare is low compared to the national average which indicates the presence of farming inefficiency in the study area. Thus, this study was undertaken with the objective of estimating the level of farmers’ technical efficiency in maize production and identifying the factors which determine the variation in the level of technical efficiency among the farmers. Results This study was relied on the primary data collected from a sample of maize producing farm household of Adola Rede and Anna Sorra districts of the Guji Zone using a survey questionnaire. A simple random sampling technique was found appropriate for selecting the respondents, since the populations of these study area are homogeneous. The analysis was relied on a cross-sectional data collected from 234 sample farm households. A one-step stochastic frontier normal/truncated-normal model was used to estimate the farmers’ technical efficiency as well as to identify the determinants of yield per hectare of maize which was estimated by maximum-likelihood method. The empirical result indicates that there are large numbers of inefficient farmers in both districts. The estimated technical efficiency for maize producing farmers is equal to 69.03%. Besides, the current study revealed that 69.23% of maize producing farmers have been operating within a technical efficiency score interval equal to (0.5–0.75) in both districts. In addition, the maize yield per hectare in the study area is very low compared to the national average, i.e., the mean yield is 19.2 quintal per hectare. Moreover, the maximum-likelihood results show that gender of the head of the household, age of the head of the household, farm income, row planting, access to credit, number of active labor force, land size owned, access to improved seed and seed type used, and number of livestock were significantly determine the farmers technical inefficiency. Conclusion The results of the study revealed that there is an opportunity which is being squandered in maize production in the study area. For instance, with a given technology, it is possible to raise the maize yield per hectare by 30.07% in the study area. Thus, the government and any concerned stakeholders should facilitate access to improved seed and fertilizer, credit, farm technology, and short-term training. Besides, all stakeholders should work in a cooperative and organized manner to implement the full agricultural package on farm level.

scholarly journals Risk Adjusted Production Efficiency of Maize Farmers in Ethiopia: Implication for Improved Maize Varieties Adoption

2017 ◽  
Vol 5 (9) ◽  
pp. 1099
Author(s):  
Sisay Diriba Lemessa ◽  
Molla Alemayehu Yismawu ◽  
Megersa Debela Daksa ◽  
Mulugeta Damie Watabaji
Keyword(s):  
Technical Efficiency ◽  
Production Efficiency ◽  
Stochastic Frontier ◽  
Returns To Scale ◽  
Stochastic Frontier Approach ◽  
Technical Inefficiency ◽  
Maize Production ◽  
Production Risk ◽  
Access To Credit ◽  
Maize Varieties

This study analyzes the technical efficiency and production risk of 862 maize farmers in major maize producing regions of Ethiopia. It employs the stochastic frontier approach (SFA) to estimate the level of technical efficiencies of stallholder farmers. The stochastic frontier approach (SFA) uses flexible risk properties to account for production risk. Thus, maize production variability is assessed from two perspectives, the production risk and the technical efficiency. The study also attempts to determine the socio-economic and farm characteristics that influence technical efficiency of maize production in the study area. The findings of the study showed the existence of both production risk and technical inefficiency in maize production process. Input variables (amounts per hectare) such as fertilizer and labor positively influence maize output. The findings also show that farms in the study area exhibit decreasing returns to scale. Fertilizer and ox plough days reduce output risk while labor and improved seed increase output risk. The mean technical efficiency for maize farms is 48 percent. This study concludes that production risk and technical inefficiency prevents the maize farmers from realizing their frontier output. The best factors that improve the efficiency of the maize farmers in the study area include: frequency of extension contact, access to credit and use of intercropping. It was also realized that altitude and terracing in maize farms had influence on farmer efficiency.

The ripple effect of credit accessibility on the technical efficiency of maize farmers in Ghana

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anthony Siaw ◽  
Yuansheng Jiang ◽  
Martinson Ankrah Twumasi ◽  
Wonder Agbenyo ◽  
Gideon Ntim-Amo ◽  
...  
Keyword(s):  
Technical Efficiency ◽  
Farm Size ◽  
Farm Income ◽  
Agricultural Credit ◽  
Maize Production ◽  
Content Type ◽  
Frontier Analysis ◽  
Access To Credit ◽  
Variable Approach ◽  
The Impact

PurposeThe purpose of this study is to examine the impact of access to credit on technical efficiency (TE) of maize farmers in a developing country, Ghana.Design/methodology/approachThe study employed an instrumental variable approach and the stochastic frontier analysis (SFA) method for the estimation of the results.FindingsThe study found that farmers who have access to agricultural credit stand the chance of increasing TE by a margin of 8%, which also influences the maize production than those who did not have access to credit. The average TE score of the farmers was 74%. The study also found out that factors like membership, gender, farmers' access to credit, age and social network determine farmers' possibility of accessing agricultural credit. The study finds out that returns to size are increasing among the maize farmers and that significant improvement in efficiency can be realized by increasing the level of input used in production. Also, factors such as farm size, labor, seeds and fertilizer are the essential determinants of maize production output. Also, gender, extension, age, off-farm income, access to credit and membership were significant factors influencing technical inefficiency (TI).Originality/valueThe paper contributes to the existing literature on agricultural credit on rural agricultural development. The problem of endogeneity associated with access to credit, which has been considered by other researchers, is dealt with this study. This paper also provides information to government policymakers, practitioners and all other stakeholders in the maize sub-sectors and also will benefit small farmers outside the study area.

Farm size and production efficiency in Chinese agriculture: output and profit

2019 ◽  
Vol 11 (1) ◽  
pp. 20-38 ◽  
Author(s):  
Jiao Yan ◽  
Chunlai Chen ◽  
Biliang Hu
Keyword(s):  
Agricultural Production ◽  
Production Efficiency ◽  
Stochastic Frontier ◽  
Farm Size ◽  
Land Consolidation ◽  
Profit Efficiency ◽  
Content Type ◽  
Land Size ◽  
The Relationship ◽  
Land Using

PurposeThe purpose of this paper is to analyze the relationship between farm size and agricultural production efficiency from the aspects of output and profit in order to find an optimal farm size that achieves both output and profit efficiency in agricultural production in China.Design/methodology/approachThis study uses the 2012 China Family Panel Studies survey data and employs the stochastic frontier analysis (SFA) models to investigate empirically the relationship between farm size and agricultural production efficiency.FindingsThe study finds that there is an inverted-U curve relationship between farm size and output efficiency and a U-shaped curve relationship between farm size and profit efficiency in agricultural production in China. Based on the empirical results, the study estimates that the appropriate farm size is around 10–40 mu and the optimal farm size is around 20–40 mu both in terms of output efficiency and profit efficiency in Chinese agricultural production under the current agricultural technology and land management system.Practical implicationsThe findings of this study suggest that appropriate land consolidation will bring more benefits to farmer households and agricultural production efficiency. There are some policy implications. First, governments should give long term and more stable land using rights to farmers through extending the period of land contract and verifying land using rights. Second, governments should encourage transfers of land using rights and promote land consolidation. But the implementation of this policy should consider regional differences and not be used for blindly pursuing increasing land size. Third, land consolidation should be accompanied with the development of specialized agricultural services.Originality/valueThe paper makes two major contributions to the literature. First, the authors use the SFA model to investigate the relationship between land size and agricultural production efficiency. Second, the authors establish two SFA models – the stochastic frontier output analysis model and the stochastic frontier profit analysis model – to estimate the optimal land size to achieve both output and profit efficiency of agricultural production in China.

scholarly journals Economic implication of contract farming on small-scale rice farmers in Kwara State, Nigeria

Agrosearch ◽  
2020 ◽  
Vol 19 (2) ◽  
pp. 26-40
Author(s):  
S.O. Akanbi ◽  
W.I. Alarape ◽  
O.S. Olatunji
Keyword(s):  
Technical Efficiency ◽  
Positive Impact ◽  
Stochastic Frontier ◽  
Farm Size ◽  
Farm Income ◽  
Small Scale ◽  
Economic Implication ◽  
Contract Farming ◽  
Productivity Level ◽  
Rice Farmers

This study examines the implication of contract farming on Olam Out-growers farming scheme in Kwara State, Nigeria. The objectives of the study are to determine the costs and returns to production of rice, assess the productivity level of rice, evaluate the technical efficiency of rice farm and identify the determinants of the technical inefficiency of the rice farms in contract farming. In this study, the average net farm income of the rice farmers under the scheme was N191,862.56 and the land productivity level was 2,006.04kg/ha. The technical efficiency of the rice farm was estimated using Cobb-Douglas Stochastic Frontier Production function which shows that likelihood coefficients for quality of seeds, hired labour and farm size were statistically significant at 1% level. Likewise, the determinants of technical efficiency among the farmers were household size and farming experience. The results further show that the contract farming scheme has a positive impact on the lives of rice farmers. Therefore, there is a need for partnership with private contract farming outfits in order to improve the current level of access to inputs by rice farmers. Keywords: Contract farming, Out-growers rice farmers, Technical efficiency, Farm income

scholarly journals Technical Efficiency Analysis of Millet Production in the Sahel Region of Burkina Faso

2020 ◽  
Vol 11 (1(S)) ◽  
pp. 10-18
Author(s):  
Windinkonté SEOGO ◽  
W. Jean-Pierre SAWADOGO
Keyword(s):  
Burkina Faso ◽  
Technical Efficiency ◽  
Production Efficiency ◽  
Formal Education ◽  
Stochastic Frontier ◽  
Farm Income ◽  
Factors Affecting ◽  
Access To Credit ◽  
Income Breeding ◽  
Sahel Region

Millet is the basic cereal crop which contributes to rural households’ food security in the Sahel region of Burkina Faso. This study assesses the technical efficiency and its determinants of millet farmers in this region. A stochastic frontier approach is followed to analyze data collected on 106 households randomly selected in 2017. The mean technical efficiency is estimated at 71.23% implying that millet production may be increased by 28.77% with the same resources used by farmers. The results show that formal education, off farm income, breeding, and access to credit are the main factors affecting the production efficiency. The study recommends decisions makers to take appropriate measures regarding these factors, to enhance millet productivity in the Sahel region.

scholarly journals Improving farm productivity through the reduction of managerial and technology gaps among farmers in Rwanda

2021 ◽  
Vol 10 (1) ◽  
Author(s):  
Jules Ngango ◽  
Seungjee Hong
Keyword(s):  
Food Security ◽  
Technical Efficiency ◽  
Production Efficiency ◽  
Technical Assistance ◽  
Cost Effective ◽  
Sub Saharan Africa ◽  
Maize Production ◽  
Maize Productivity ◽  
Efficiency Measures ◽  
Maize Varieties

Abstract Background Rwanda and most parts of sub-Saharan Africa face severe challenges of increasing maize productivity, which has direct consequences on food security. Due to these challenges, policy-makers have paid particular attention to finding the cost-effective strategies of boosting maize production. In an effort to increase productivity, the literature suggests that the adoption of yield-enhancing technologies and production efficiency should be given priority. The objective of this study is to examine and compare the technical efficiency and technological gaps of maize farms that grow different seed varieties in Rwanda. Methods The data used in this study were obtained from a survey of 360 household farmers conducted in the Eastern Province of Rwanda during the 2018–2019 cropping season. The study applies the stochastic meta-frontier production function approach to estimate the technical efficiency and technological gaps of maize farms operating under heterogeneous production technologies. Results Results indicate that there are differences in technical efficiency measures among the three groups of farmers (i.e., adopters of hybrids, open-pollinated varieties, and local maize varieties). In particular, we find that on average, farms growing hybrid maize varieties appear to have higher values of technical efficiency, technology gap ratio, and meta-frontier technical efficiency than farms growing OPVs and local maize varieties. Thus, the analysis shows that there are significant technological and managerial performance gaps among farmers. Conclusions From a policy perspective, the results of this study suggest the development of policy measures that may reduce the managerial and technological gaps existing among farmers to improve productivity and food security. Based on the results of this study, one of the crucial avenues to close this gap would be to improve access to improved agricultural technologies such as certified hybrid seeds. Additionally, policies aiming to enhance technical efficiency and productivity should focus on expanding the delivery of extension services and strengthening the technical assistance provided to farmers’ cooperatives.

scholarly journals Technical efficiency of Boro rice production in Bangladesh: A case of bio-slurry application

2016 ◽  
Vol 13 (1) ◽  
pp. 101-108 ◽  
Author(s):  
H Kabir ◽  
M Musharraf ◽  
MM Haque ◽  
M Khan
Keyword(s):  
Production Efficiency ◽  
Stochastic Frontier ◽  
Rice Production ◽  
Farm Size ◽  
Farm Income ◽  
Production Data ◽  
Chemical Fertilizers ◽  
Labour Requirement ◽  
The Impact ◽  
Boro Rice

The main objective of this study is to estimate the impact of bioslurry to Boro rice production in Bangladesh. Translog production function through Stochastic Frontier Apoproach (SFA) was applied for estimating the efficiency of Boro production. Data were collected from biogas users in the four district of Bangladesh: Mymensingh, Pabna, Thakurgaon and Dinajpur. Biogas users have received significant impact from bio-slurry to Boro rice production while chemical fertilizers have no significant impact to same production. The production efficiency of biogas users is notably different from traditional farms. The efficiency differences are explained mostly by farm size, year of education, family size and off-farm income. Bio-slurry could be applied for reducing application of chemical fertilizers, pesticides and labour requirement that lead to more organic agriculture practices with producing more output, earn more income and save foreign currency.J. Bangladesh Agril. Univ. 13(1): 101-108, June 2015

Does household engagement in concurrent business affect the farm size-technical efficiency relationship in grain production?

2019 ◽  
Vol 11 (1) ◽  
pp. 125-142 ◽  
Author(s):  
Min Zhong ◽  
Yuchun Zhu ◽  
Qihui Chen ◽  
Tianjun Liu ◽  
Qihua Cai
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Negative Relationship ◽  
Northern China ◽  
Farm Size ◽  
Farm Income ◽  
Content Type ◽  
Frontier Analysis ◽  
Two Factors

Purpose The purpose of this paper is to examine how households’ engagement in concurrent business (CB), which is measured by the contribution of off-farm income to household income, affects the farm size–technical efficiency (TE) relationship in Northern China. Design/methodology/approach This paper applies a stochastic frontier analysis method to analyze data on 1,006 rural households collected from four major wheat-producing provinces in Northern China, adopting a translog specification for the underlying production function. Findings The analysis yields three findings. First, the farm size–TE relationship is inverted U-shaped for all CB engagement levels higher than 5 percent, and the most technically efficient farm size increases with the level of household CB engagement. Second, how TE varies with the level of CB engagement depends on farm size: an inverted-U relationship for relatively small farms (<10μ), a positive relationship for middle-size farms (10–20μ), and a negative relationship for large farms (>20μ). Finally, the overall TE score, 0.88, suggests that wheat output can be increased by 12 percent in Northern China if technical inefficiency were eliminated. Originality/value Unlike most previous studies that examine the impacts of farm size and households’ off-farm business involvement separately, this paper examines how these two factors interact with each other.

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