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Economic Efficiency of Rice Productionin Smallholder Irrigation Schemes: A Case of Nkhate Irrigation Scheme in Southern Malawi

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  • Magreta, Ruth

Abstract

This study used a parametric frontier approach to analyze technical, allocative and economic efficiency of smallholder rice farmers. It further explored the factors that influence the efficiency levels of the rice farmers. The study used a trans-log stochastic production function to analyze the technical efficiency. It used the trans-log cost frontier to analyze the economic efficiency. Results from these efficiencies led to the derivation of the allocative efficiency levels. It further used the inefficiency model to analyze the factors underlying efficiency differentials among the sampled farming households. Results revealed an average technical, allocative and economic efficiency levels of 65%, 59% and 53% respectively. This suggests that farmers have a rice yield potential of 35% to be exploited. The average economic efficiency level entails that farmers can raise their profitability or rice production by 47% by adjusting input use. Soil fertility status, access to credit, household size and farmers experience were the factors that influence the efficiency levels of smallholder rice farmers. It is thus recommended that for improved efficiency levels there is need for better policies and strategies that address input and output markets. Furthermore, farmer groups or associations can play a great role in ensuring that farmers get relevant technical advice, credit access as well as learn and share knowledge from each other.

Suggested Citation

  • Magreta, Ruth, 2011. "Economic Efficiency of Rice Productionin Smallholder Irrigation Schemes: A Case of Nkhate Irrigation Scheme in Southern Malawi," Research Theses 198524, Collaborative Masters Program in Agricultural and Applied Economics.
    • Handle: RePEc:ags:cmpart:198524
    DOI: 10.22004/ag.econ.198524
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