Leveraging the Stochastic Frontier Model for Optimal Technical Efficiency in Tanzanian Maize and Paddy Crops Production

This study evaluates the technical efficiency of maize and paddy production among smallholder farmers in Tanzania, focusing on identifying socio-demographic and institutional factors that influence inefficiency. Agriculture is critical to Tanzania’s economy, contributing significantly to GDP and rural livelihoods. However, low productivity and inefficiency persist, particularly in maize and paddy farming. This study aims to assess the levels of technical efficiency and determine the socio-economic and institutional determinants that affect production efficiency in these crops. This study utilised data from the 2014/15 National Panel Survey, comprising a sample of 1,699 household heads from a targeted population of 3,352 households. A stratified two-stage sampling design was employed, with data analysed using Stochastic Frontier Analysis (SFA). The Cobb-Douglas production function was used to estimate technical efficiency, while socio-demographic factors such as age, education, marital status, household size, and institutional variables such as credit access and training were incorporated into the inefficiency model. The findings reveal that the average technical efficiency for maize and paddy production is 51.45% and 33.27%, respectively, indicating significant potential for output increases without additional resources. Maize farmers exhibited higher efficiency levels than paddy farmers. The key determinants of inefficiency include age, education, household size, and access to extension services and training. Younger, educated, and married farmers and those with access to training and extension services demonstrated higher efficiency levels.