Techinical and Allocative efficiency of smallfolder maize farmers in Zambia

Abstract

Maize is Zambia’s staple food and is widely grown by smallholder farmers throughout the country. The productivity of this crop has been persistently low despite various private and public sector interventions. This paper determines the technical and allocative efficiency of smallholder maize farmers in Zambia. Most studies on efficiency in Zambia have used parametric methods to estimate efficiency. These methods ignore the importance of individual farms. This study appreciates individual farms and hence opts to use a non-parametric method of estimation, the Data Envelopment Analysis (DEA). It further links the observed efficiency or inefficiency to farmers’ socio-economic characteristics through regression analysis.

The DEA results indicate very low levels of technical and allocative efficiency among smallholder maize farmers. Technical efficiency scores range from 0.071 through 1 while allocative efficiency ranges between .001 and 1. On average, farmers are 30 percent technically efficient and only 1.18 percent of the farmers are fully efficient. Allocatively farmers are 12 percent efficient with only 0.33 percent being efficient. This means that on average, the level of inputs (land, labour, seed and fertilizer) used by farmers can be reduced by 70 percent while costs can be reduced by 88percent without affecting the current level of output.

Regression results have shown that use of certified hybrid seed, livestock ownership, and education attainment of household head improves both technical and allocative efficiency. The same results further show that involvement in community agricultural activities, use of mechanized tillage methods and use of organic or chemical fertilizers improves technical efficiency among farmers. Farmers who used certified hybrid seed are likely to get higher yields while farmers belonging to agricultural association or are involved in community agricultural activities are expected to have better access to extension services than those who are not.

Based on these findings, policy makers in agriculture should focus on strategies to reduce input use while maintaining current production or increase output from the current level of inputs. Policy makers should therefore promote ownership of livestock which acts as a social buffer and allows farmers to access expensive but efficiency promoting technologies like fertilizer and certified seed while encouraging use of affordable mechanized tillage through draught power to reduce on the time and labour spend in maize production. Given that certified hybrid seed and fertilizer use improves efficiency and that farmers use improper application rates, policy makers should devise strategies on how best to provide extension services to farmers to help them appreciate both the use of and adherence to recommended application rates to improve productivity. Improved extension services will help improve the level of output from the current level of inputs. Farmers groups should be encouraged and strengthened to improve access to market information and other extension services as results have shown that farmers belonging to associations are more efficient.