APPLICATION OF STOCHASTIC FRONTIER APPROACH MODEL TO ASSESS TECHNICAL EFFICIENCY IN KENYA’S MAIZE PRODUCTION

Abstract

Kenya realised tremendous growth in maize production between 1964 and 1997, fueled by the introduction of high yielding hybrid maize. However, from 1997, there has been a decline in yield from 1.85 to 1.57 metric tones per hectare with observed supply shortages occasionally. Maize shortages result in famine among the poor urban and rural households. Since almost all  the arable land is under cultivation, future increase in maize production will heavily depend on technical efficiency and yield improvement rather than expansion in area under production. The main objective of this  study was to determine the technical efficiency of smallholder maize production in Kenya. The stochastic frontier model was used as the method of analysis to estimate several production function forms using cross-sectional household data for the 2003/2004 main cropping season. Variations in technical efficiency index across smallholder farm units were explained through a number of socio-economic, farm characteristic and Agro-Ecological Zone variables. The results of the translog functional form revealed that the technical efficiency index across smallholder farm units ranged from 8 to 98 percent. Purchased hybrid seeds, use of tractors for land preparation, number of school years of household head, male headed households, age of household head, access to credit and high potential zone dummy variables had a negative sign, and therefore decreased technical inefficiency (increased technical efficiency). Calculations of marginal effects showed that purchased inputs and primary education had the highest improvement of technical efficiency i.e. hybrid seed (36%), tractor services (26%) and an extra year of household head primary schooling (0.84%). It is therefore concluded that improvement of maize input markets together with an emphasis on primary school education would enhance maize productivity. Thus, if hybrid seeds, tractor services and agricultural credit are made available and affordable to farmers technical efficiency would increase.