Economic analysis of beef Cattle Farmers’ technical efficiency and willingness to comply with Disease Free Zones in Kenya
Abstract
In Kenya, the cattle enterprise is an important source of livelihood for many farmers.
However, lack of analytical evidence on efficiency levels of farmers in various production
systems constrains policy making on optimal resource allocation. In addition, inability to
control livestock diseases, such as Foot and Mouth Disease (FMD), has led to low beef supply
in Kenya and loss of export markets. Although the government of Kenya plans to establish
Disease Free Zones (DFZs) to address the disease challenge, there is no empirical evidence on
farmers’ willingness to comply with DFZs.
This study analyses farmers’ technical efficiency (TE) and willingness to comply with DFZs,
across three main cattle production systems in Kenya. Primary data were gathered through
household surveys using a structured questionnaire and a choice experiment (CE) based on a
D-optimal design. The stochastic metafrontier model was applied to estimate TE and
technology gaps across farms. Subsequently, possible determinants of TE were assessed using
a Tobit model. In addition, farmers’ preferences for DFZ attributes and various possible
policy scenarios were investigated using a random parameter logit (RPL) model.
Results show that there is significant inefficiency in both the nomadic and agro-pastoral
systems, but less in ranches. Further, in contrast with the other two systems, ranches are found
to have higher meta-technology ratios (MTRs). The average pooled TE with respect to the
metafrontier is estimated to be 0.69, which suggests that there is considerable scope to
improve beef production in Kenya. The main factors that are found to have a positive
influence on TE include: use of controlled cattle breeding method, access to market contract,
presence of farm manager, off-farm income and larger herd size. The findings also show that
farmers would be willing to pay to participate in a DFZ where: adequate training is provided
on pasture development, record keeping and disease monitoring; market information is
provided and sales contract opportunities are guaranteed; cattle are properly labelled for ease
of identification; and some monetary compensation is provided in the event that cattle die due
to severe disease outbreaks. In general, there is a higher preference for DFZ policy scenarios
that incorporate training, and market information and contract. Further, farmers with
relatively low TE, and typically limited access to disease control services, are shown to be
more willing to participate in the DFZs. These insights should guide policies on beef cattle
production and the design of DFZ programmes in Kenya and other countries that face similar
challenges.
Citation
Otieno, D. J(2011). Economic analysis of beef cattle farmers’ technical efficiency and willingness to comply with Disease Free Zones in KenyaPublisher
Department of Agricultural Economics, University of Nairobi, Kenya
Description
PhD Thesis