ESTIMATION OF MILK PRODUCTION EFFICIENCY OF DAIRY COW FARMS IN EMBU AND MERU COUNTIES OF KENYA

Abstract

This study aimed at determining the technical and cost efficiencies of dairy cow farms in Embu and Merucounties of Kenya, as indicators of milk access potential. Data were collected from 135 randomly sampledfarms in 2010. The sample size was determined using the Cochran’s (1977) formula. Data were collected usingsemi-structured questionnaires, after which they were entered into the excel spreadsheets andedited.Stochastic frontier production and cost functions were estimated using the maximum likelihoodestimation (MLE) technique. Results revealed that the number of lactating cows and the amounts ofroughages, concentrates, and mineral supplements were the major factors influencing milk output, while theprices of roughages and labour caused most variation in the production cost. The mean farmers’ technical andcost efficiency indices were 0.837 and 1.044, respectively. The function coefficient of the production modelwas 2.11. These results implied that milk production could be increased by 16.3% through better use ofavailable resources given the current state of technology without extra cost, while the cost of milk productioncould be decreased by about 4.4% without decreasing output. It was concluded that optimization of farmefficiencies while taking advantage of economies of scale through increased production inputs could be part ofshort-term measures to address the challenges facing smallholder dairy farming. The researchers requireidentifying inefficiency determinants and ensuring stakeholder involvement in the process to enhanceadoption of the outputs. The policy makers should discourage sub-division of agricultural land whileconcurrently promoting enterprise specialization, support approaches to make feed concentrates, mineralsupplements and chaff-cutters affordable, and emphasize on the reduction in cost of production.