Analysis of production efficiency in Irish potato production in Kenya The case of Nyandarua North District

Abstract

During the past two decades, agricultural scientists in Kenya in collaboration with International Potato Centre have released numerous new varieties, developed improved Irish potato management practices, and actively worked with government agencies, NGOs and farmer groups to ensure that these improved technologies are widely available to farmers. However data on national Irish potato production in Kenya fail to demonstrate that these efforts have had an impact on national mean yields. Trends in national Irish production show that in the last twenty years there has been no significant increase in average national yields and hence productivity. Using farm-level data collected from 127 farmers through multi-stage sampling technique, this study employed a stochastic parametric decomposition and neoclassical duality model to estimate the technical, allocative and economic efficiency of a sample of Irish potato producers in Nyandarua North district. To elicit information on these aspects, a Cobb-Douglas production frontier was specified and estimated by using Maximum Likelihood techniques. The estimated production frontier was used to derive the dual cost frontier. These two frontiers were used to derive farm-level efficiency measures. In addition a two-limit Tobit analysis was used to determine socio-economic and institutional factors that influence economic efficiency of Irish potato producers in the study area. Results reveal that smallholder Irish potato farmers are inefficient; the average efficiency scores are 66.7 percent, 57.3 percent and 38.1 percent for technical, allocative and economic efficiency respectively. The two-limit Tobit results indicate that education level of the household head (number of years of formal schooling), contact with extension, use of credit in Irish potato production, and membership in a farmers’ association are significant factors for improving the level of efficiency. There is need to expand farmer education complimented by quality and effective extension service on improved agronomic and management practices. Innovative ways need to be devised that will ensure that farmers are enabled to access credit at a reasonable cost.