| dc.description.abstract | This study investigated economic efficiency in smallholder maize-based farming system
of Northwestern Kenya, in the context of integrated soil fertility management (ISFM)
options developed by Kenya Agricultural Research Institute. The study used farmhousehold
data to: i) evaluate differences in technical, allocative and economic efficiency
levels, and ii) establish factors determining technical, allocative and economic efficiency
in maize production. Stochastic production and cost frontier models within production
theoretical framework were applied in analyzing cross-sectional data from 373 small-scale
maize farmers stratified by agro-ecological zones and soil fertility management choices in
Trans Nzoia and Lugari Districts.
The results indicate that on average, maize farmers were only 49 percent economically
efficient. This was largely due to low technical efficiency, estimated at 64 percent given
that most farmers had high allocative efficiency, averaging 75 percent. This finding is
consistent with the view that resource-poor farmers are highly efficient in allocating the
limited financial resources at their disposal. The results demonstrate that efficient maize
production has enormous potential to improve general welfare gains from technological
interventions as well as enhance farmers' incentives to invest in soil fertility management.
Moreover, farmers who used integrated soil fertility management strategies in maize
production were found to operate closer to their efficient frontiers than those who applied
inorganic fertilizers alone. Extrapolation of efficiency gains to the study region indicate
that enhanced technical efficiency had potential to add about 183,000 tonnes of maize
grains while cost savings from better allocative efficiency was Ksh 768 million.
This study demonstrated that education, off-farm income, family size, extension contacts,
credit and market access and soil fertility management were significant factors influencing
economic efficiency in smallholder maize production in Northwestern Kenya. Therefore,
policy interventions in form of price stabilization for both maize grains and inorganic
fertilizers, increased extension coverage, improvement of rural roads and provision of
agricultural credit to relax liquidity constraint among maize farmers are recommended.
It is anticipated that the determination of these efficiency measures will be important in
targeting and scaling-up the interventions such as transfer of ISFM and other modern
technologies using group based approaches to improve technical efficiency and
productivity. Collaborative efforts by formal and informal extension service providers
supported by strong research-extension-farmer linkages are recommended. In addition, the
results will be useful in guiding the development of human capital and access to markets
and credit services in rural areas to improve allocative efficiency among smallholders for
sustainable food production and resource management in Kenya. Collective access to
credit services, input and output markets through farmer organizations are suggested as
strategies to meet collateral requirements, enhance benefits of economies of scale and
increase returns for farmers in Kenya. | en |
