Technical, Allocative, and Economic Efficiency and Profitability of Black Soldier Fly Farming Among Smallholder Farmers in Selected Counties in Kenya

Black Soldier Fly (BSF) has emerged as a source of protein and frass fertiliser, while also helping reduce greenhouse gas emissions. Despite promising opportunities in BSF farming, low production levels, labour-intensive technologies, limited input resources, and rearing systems hinder the optimization, consumption, and marketing of BSF and its products. Therefore, the study aimed to determine the technical, allocative, and economic efficiency and profitability of BSF farming among smallholder farmers in selected counties in Kenya. Guided by the production theory of the firm and profit maximization theory, the research analysed secondary data from 373 smallholder BSF farmers across 12 counties in Kenya, collected by the National Agricultural Value Chain Development Project (NAVCDP) in June and July 2024. Data analysis was conducted using STATA software version 17.0, employing Cobb-Douglas stochastic frontier production and cost functions, a two-limit Tobit regression model, and metrics such as gross profit margin (GPM), return on investment (ROI), and benefit-cost ratio (BCR). The results showed that the average technical efficiency was 72%, allocative efficiency was 56%, and economic efficiency was 40%, indicating that farmers in the study area were generally inefficient in their production activities. Additionally, factors such as experience, credit access, source of income, structure size, herd size, feeding times, organic waste feeds, substrate bought, agro-weather information services, output market access, and transport services significantly affected the efficiency of BSF farming. Profitability analysis revealed that production and sales of both BSF larvae and frass fertiliser yielded higher profits, with GPM, ROI, and BCR of 51.41%, 8.77%, and 1.18, respectively, compared to selling only larvae or only frass. The study recommends that the government and other development partners develop good-quality feeder roads, establish public markets, and provide grants to farmers. Farmers should also join co-operatives and informal credit/savings groups to access credit.