Determinants of Technical Efficiency of Smallholders Dairy Farmers in Njombe District, Tanzania
DOI:
https://doi.org/10.61538/ajer.v1i2.189Abstract
This paper is based on a study conducted in nine dairy cattle keeping villages of Njombe district in Tanzania with the overall objective of estimating Technical Efficiency (TE) and analyzing factors influencing Technical Inefficiency (TI) of smallholder dairy farmers. Cobb-Douglas stochastic frontier production function in which the parameters for the production frontier and for the inefficiency model were estimated jointly using the maximum likelihood technique on cross section data of 81 smallholder dairy farmers. Findings reveal that majority of respondents (61.7%) had TE below 50%. The implication of these findings is that majority of the respondents were technically inefficient and that the value of dairy production could be increased by 54.54% through better allocation and use of available resources. The inefficiency model showed that age, gender, education level, experience of the farmer and selling to processor are major factors having a significant and positive influence on the farmers’ technical inefficiency while marital status and use of hired labor are the major factors having a significant and negative influence on the farmers’ technical inefficiency. ÂReferences
Adepoju, A. A. (2008) “Technical Efficiency of Egg Production in Osun State.†International
Journal of Agricultural Economics and Rural Development - 1 (1)
Aigner, D. J., Lovell, C., and Schmidt, P. (1977) “Formulation and Estimation of Stochastic Frontier Production Models,†Journal of Econometrics, 6, 21-37.
Ajibefun, I.A, (2002) “Analysis of Policy Issues in Technical Efficiency of Small Scale Farmers Using the Stochastic Frontier Production Function: With Application to Nigerian Farmers,†Paper presented at the 13th International Farm Management Congress, Wageningen, The Netherlands, and July 7-12, 2002.
Battese, G. E. and Coelli, T. J. (1995) “A model for technical inefficiency effects in a stochastic frontier production function for panel data,†Empirical Economics 20: 325-332.
Ben-Belhassen, B. (2000). Measurement and Explanation of Technical Efficiency in Missouri hog Production. Selected Paper, American Agricultural Economics Association (AAEA), Annual Meeting. Tampa, Florida, 30 July – 2 August.
Burhan O. R., Figen C. and Hatice K, (2009) “A Review of Literature on Productive Efficiency in Agricultural Production,â€Journal of Applied Sciences Research, 5(7): 796-801,
Burki, A. A and Khan, M.A (2007) “Milk Districts and Efficiency of Smallholder Dairy
Producers in Pakistan†Lahore University of Management Sciences (LUMS)
Cabrera, V. E., Daniel SolÃs, D. and Julio Del Corral, J. (2010) The Effect of Traditional Practices in the Efficiency of Dairy Farms in Wisconsin Selected Paper Presented at the Southern Agricultural Economics Association Annual Meeting, Orlando, FL, February 6-9, 2010.
Coelli, T. J. (1996) “A Guide To Frontier Version 4.1 A Computer Program For Stochastic Frontier Production And Cost Function Estimation,†CEPA Working Papers, 96/07, University of New England, Australia. 135pp.
Debreu, G. (1951) “The coefficients of resource utilization,†Econometrica 19 (3): 273-92
FAO. (2005). Livestock Sector Brief: United Republic of Tanzania. Livestock Information, Sector Analysis and Policy Branch AGAL.
Haghiri, M. (2003). Stochastic Non-Parametric Frontier Analysis in Measuring Technical
Efficiency. A Case Study of the North American Dairy Industry: A Thesis Submitted to the College of Graduate Studies and Research In Partial Fulfillment of the Requirements For the Degree of Ph.D. in the Department of Agricultural Economics University of Saskatchewan Jaforullah, M., and Whiteman, J. (1999) “Scale efficiency in the New Zealand dairy industry: A non-parametric approach,†Australian Journal of Agricultural and Resource Economics, 43:523– 541.
Kibaara, B. W. (2005). Technical Efficiency in Kenyan’s Maize Production: An Application of the Stochastic Frontier Approach. Thesis Submitted to Department of Agricultural and Resource Economics in partial fulfillment of the requirements For the Degree of Master of Science Colorado State University. Fort Collins, Colorado
Kolawole, O and Ojo, S.O, (2007) “Economic Efficiency of Small Scale Food Crop Production in Nigeria: A Stochastic Frontier Approach,†Kamla-Raj J. Soc. Sci., 14(2): 123-130.
Kumbhakar, S. and Lovell, C. (2000) Stochastic Frontier Analysis: Cambridge University Press.
Kumbhakar, S.C., Ghosh, S. and McGuckin J.T. (1991) “A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. dairy farms,†Journal of Business and Economic Statistics, 9: 279–86.
Kurwijila, L.R (1995) An overview of dairy development in Tanzania. Strategies for market orientation of small scale milk producers and their organizations. Proceedings of a Workshop Held at Morogoro Hotel, Morogoro, Tanzania, 20 - 24th March, 1995 Food and Agriculture Organization of the United Nations Rome and Sokoine University of Agriculture.
Lwelamira, J.L., Binamungu, H K and Njau, F B (2010) “Contribution of small scale dairy farming under zero-grazing in improving household welfare in Kayanga ward, Karagwe District, Tanzania,†Livestock Research for Rural Development 22(2)
Meeusen, W., and van den Broeck, J. (1977) “Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error,†International Economics Review, 18:2, 435-44.
Msuya, E. E. and Ashimogo, G. C. (2006) “An estimation of technical efficiency in Tanzanian sugarcane production: A case study of Mtibwa sugar company out grower’s scheme†Economic and Development Papers, Mzumbe University , Vol. 1, No. 1
Msuya, Elibariki and Ashimogo, Gasper. (2005) “Estimation of Technical Efficiency in Tanzanian Sugarcane Production: A Case Study of Mtibwa Sugar Estate Out growers Scheme†MPRA Paper No. 3747
Mwakalile I F N, Bachmann F, Mshana Y and Mgittu V F (2002). Improved livestock management and rural livelihood: Twenty years of experience of southern highlands dairy development project in Mbeya and Iringa region, Tanzania. In: Proceedings of the joint Scientific Conference of the 17th Scientific Conference of Tanzania Society of Animal
Production and the 20th Scientific Conference of Tanzania Veterinary Association, 3 – 5,
December 2002, Arusha, Tanzania, pp 35-51
Nchare, A. (2007) “Analysis of Factors Affecting the Technical Efficiency of Arabica coffee
Producers in Cameroon African Economic Research Consortium, Nairobi†AERC Research Paper 163
Nguyen, N.B (2010). Estimation of Technical Efficiency in Stochastic Frontier Analysis: A Dissertation Submitted to the Graduate College of Bowling Green State University in partial fulfillment of the requirements for the degree of Doctor of Philosophy. College of Bowling Green State University
Njombe. A.P and Msanga. Y. N , (2008). Livestock and Dairy Industry Development in Tanzania. Department of Livestock Production and Marketing Infrastructure Development. Ministry of Livestock Development.
Nkya, R., Kessy, B. M., Lyimo, Z. C., Msangi, B. S. J., Turuka, T., and Mtenga, K. (2007). “Constraints on Smallholder Market Oriented Dairy Systems in the North Eastern Coastal
Region of Tanzania,â€Tropical Animal Health and Production, Volume 39, Issue 8, pp 627-636
Sesabo, Jennifer K and Tol, Richard S J (2007) “Technical efficiency of small-scale fishing households in Tanzanian coastal villages: An empirical analysisâ€. African Journal of Aquatic Science, 32 (1). pp. 51-61
Sumberg J.E. 1997. Policy, milk and the Dar es Salaam peri-urban zone: A new future or an old development theme? Land Policy 14(4):277–293.
Technical Wubeneh, N and Ehui, S. (2006). Efficiency of Smallholder Dairy Farmers in the Central Ethiopian Highlands. Paper presented at the International Association of Agricultural Economists Conference, Gold Coast, Australia, and August 12-18, 2006.
Tyler William G. and Lee Lung-Fei. (1979) “On Estimating Stochastic Frontier Production Functions and Average Efficiency: An Empirical Analysis with Columbian Micro Data,†The Review of Economics and Statistics, Vol. 61, No. 3, pp. 436-438
