What are the Key Constraints in Technical Efficiency of Smallholder Farmers in Africa? Empirical Evidence from Kenya

Abstract

The idea that smallholder farmers are reasonably efficient has triggered much debate in Sub-Saharan Africa. Indeed, efficiency of smallholder farmers has implications for choice of development strategy; reason being that Sub-Saharan countries derive over 60% of their livelihoods from smallholder agriculture and rural economic activities. This paper evaluates factors that promote production efficiency among smallholder farmers in Kenya as avenues for policy intervention. A production frontier function was fitted to a random sample derived from a survey carried in 2007. Results show that all conventional inputs had the expected significance. On the inefficiency indicators, ownership to farmland, attendance to agricultural workshops, access to credit and participation in self-help groups significantly reduced inefficiency, while age, market distance, female gender and formal education increased inefficiency. Our findings suggest that within the available technologies, farmers can improve on their productivity if they nurture teamwork as in groups where labour is shared. Besides, better roads would reduce transaction costs and promote higher returns, and training in agriculture would boost efficient resources use for better performance. Therefore, there exists opportunity to improve efficiency in production given existing farm technologies.Technical Efficiency, Smallholder Farmers, Africa, Productivity Analysis,