A Study on the Dynamic Relationship Between Financial Development and Investment: Evidence from Sub-Saharan Africa

Abstract

This study examined the impact of climate variability on rain-fed rice production in the northern agro-ecological zone (NAEZ) of Uganda. We used stochastic frontier model to analyse a four year (2013-2016) farm-level data. The results of the maximum likelihood estimates revealed negative effects of mean rainfall and coefficient of variation in rainfall on rice output but coefficient of variations in mean temperature was positive. The production frontier exhibited increasing returns to scale technology, low level of efficiency was exhibited and inefficiencies were driven by location, age, plot size and number of crops. We therefore conclude that rice farmers are producing inefficiently and increased variability in climate has adverse effects on rice production frontier but inefficiencies are being propelled by farmers' characteristics. Based on the findings, we recommend promoting awareness about climate variability and potential response alternatives for rice production and further research into coping strategies being used by rice farmers.