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Economic Efficiency of Smallholder Irish Potato Producers in Kenya: A Case of Nyandarua North District

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  • Nyagaka, Daniel
  • Obare, Gideon A.
  • Nguyo, Wilson
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    Abstract

    With declining Irish potato production trends in Kenya this paper identifies and analyses factors that influence the economic efficiency of smallholder Irish potato producers in Kenya by drawing on data from random sample of 130 smallholder farmers from Nyandarua North district. A dual stochastic parametric decomposition technique is used to disaggregate economic efficiency components and a two-limit Tobit model is used to derive efficiency indices as a function of a vector of socio-economic characteristics and institutional factors. Empirical results show decreasing returns to scale in production. The mean economic efficiency is 0.39 with a range of 0.12 - 0.66. Education, access to extension, access to credit and membership in a farmers association positively and significantly influence economic efficiency. Innovative institutional arrangements that enhance extension and farmer training, accompanied with improved access to credit is likely to enhance potato production efficiency.

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    Bibliographic Info

    Paper provided by International Association of Agricultural Economists in its series 2009 Conference, August 16-22, 2009, Beijing, China with number 49917.

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    Date of creation: 2009
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    Handle: RePEc:ags:iaae09:49917

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    Web page: http://www.iaae-agecon.org/
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    Keywords: Efficiency; productivity; stochastic frontier functions; Kenya; Agricultural and Food Policy; Food Security and Poverty; Land Economics/Use; Production Economics; Productivity Analysis; Research and Development/Tech Change/Emerging Technologies; D12; D24; O33; Q16;

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    1. Binam, Joachim Nyemeck & Tonye, Jean & wandji, Njankoua & Nyambi, Gwendoline & Akoa, Mireille, 2004. "Factors affecting the technical efficiency among smallholder farmers in the slash and burn agriculture zone of Cameroon," Food Policy, Elsevier, vol. 29(5), pages 531-545, October.
    2. Xu, Xiaosong & Jeffrey, Scott R., 1998. "Efficiency and technical progress in traditional and modern agriculture: evidence from rice production in China," Agricultural Economics, Blackwell, vol. 18(2), pages 157-165, March.
    3. 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.
    4. Abdulai, Awudu & Eberlin, Richard, 2001. "Technical efficiency during economic reform in Nicaragua: evidence from farm household survey data," Economic Systems, Elsevier, vol. 25(2), pages 113-125, June.
    5. Kopp, Raymond J. & Diewert, W. Erwin, 1982. "The decomposition of frontier cost function deviations into measures of technical and allocative efficiency," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 319-331, August.
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    Cited by:
    1. Sibiko, Kenneth Waluse, 2012. "Determinants of Common Bean Productivity and Efficiency: A Case of Smallholder Farmers in Eastern Uganda," Research Theses 134500, Collaborative Masters Program in Agricultural and Applied Economics.

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