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Determinants of technical efficiency differentials amongst small- and medium-scale farmers in Uganda: A case of tobacco growers

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Author Info
Marios Obwona
Abstract

It is argued that technical efficiency is determined by individual farm- and farmer-specific characteristics. Such characteristics may be divided into two groups – demographic characteristics, which dominate the decision making process of the farmer, and socioeconomic and institutional characteristics, which influence a farmer’s capacity to apply the decisions at the farm level. The principal objectives of this study are to explore the potential for improving production efficiencies of farmers and to identify factors that influence such efficiencies. The study uses cross-section data from a sample of 65 small- and medium-scale farmers. A stochastic production frontier approach is used to estimate the farmer-specific technical efficiencies. The estimated efficiencies are then explained by socioeconomic and demographic factors. It is shown that education, credit accessibility and extension services contribute positively towards the improvement of efficiency. These results therefore suggest that if more resources are invested in extension services, the availability of credit is improved and there is less fragmentation of land, then there will be an improvement in technical efficiency of farmers in Uganda.

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Paper provided by African Economic Research Consortium in its series Research Papers with number RP_152.

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Length: 52 pages
Date of creation: Jan 2006
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Handle: RePEc:aer:rpaper:rp_152

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  1. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July. [Downloadable!] (restricted)
  2. Kalirajan, K P & Obwona, M B, 1994. "Frontier Production Function: The Stochastic Coefficients Approach," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 56(1), pages 87-96, February.
  3. Forsund, Finn R. & Lovell, C. A. Knox & Schmidt, Peter, 1980. "A survey of frontier production functions and of their relationship to efficiency measurement," Journal of Econometrics, Elsevier, vol. 13(1), pages 5-25, May. [Downloadable!] (restricted)
  4. Battese, George E., 1992. "Frontier production functions and technical efficiency: a survey of empirical applications in agricultural economics," Agricultural Economics, Blackwell, vol. 7(3-4), pages 185-208, October. [Downloadable!] (restricted)
  5. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August. [Downloadable!] (restricted)
  6. Feder, Gershon & Just, Richard E & Zilberman, David, 1985. "Adoption of Agricultural Innovations in Developing Countries: A Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 255-98, January.
  7. Afriat, Sidney N, 1972. "Efficiency Estimation of Production Function," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(3), pages 568-98, October. [Downloadable!] (restricted)
  8. Hayami, Yujiro & Ruttan, Vernon W, 1970. "Agricultural Productivity Differences Among Countries," American Economic Review, American Economic Association, vol. 60(5), pages 895-911, December. [Downloadable!] (restricted)
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