Analysis of Economic Efficiency and Farm Size: A Case Study of Wheat Farmers in Nakuru District, Kenya

Abstract

The primary objective of this study is to examine the effect of farm size on economic efficiency among wheat producers and to suggest ways to improve wheat production in the country. Specifically, the study attempts to estimate the levels of technical, allocative, and economic efficiencies among the sampled 130 large and small scale wheat producers in Nakuru District. The social-economic factors that influence economic efficiency in wheat production have also been determined. Results indicate that the mean technical, allocative, and economic efficiency indices of small scale wheat farmers are 85%, 96%, and 84%, respectively. The corresponding figures for the large scale farmers are 91%, 94%, and 88%, respectively. The number of years of school a farmer has had in formal education, distance to extension advice, and the size of the farm have strong influence on the efficiency levels. The relatively high levels of technical efficiency among the small scale farmers defy the notion that wheat can only be efficiently produced by the large scale farmers.

Determinants of Economic Farm-Size–Efficiency Relationship in Smallholder Maize Farms in the Eastern Cape Province of South Africa

“…The literature has revealed the popularity of Least Square techniques for estimating the farm-size-yield-per-acre relationship (Mburu et al [42]; Ladvenicová and Miklovičová [29]; Msangi [43]). This model suggests an inverse relationship when total output (Q) and β are less than 1, and also when total output (Q) per acre and β are negative [44].…”

“…Put differently, these studies are usually spurious because the value of crops is different across crop types or the same for crops across regions. However, Nkonde [46] and Abdi [47] have maintained that OLS remains important in assessing the farm-size-yield-per-acre nexus, and studies of Mburu et al [42]; Nkonde [46]; Msangi [43] have accordingly adopted OLS.…”

Metafrontier analysis of commercial and smallholder tomato production: A South African case

“…Mburu et al 48 in their analysis of economic efficiency of wheat farmers in Kenya found slightly higher technical efficiency scores for smallholder (85%) and large-scale (91%) farmers. Similarly, Khaile 22 also found that commercial raisin farmers in Eksteenskuil, South Africa, were more technically efficient (85%) than the smallholder raisin farmers (81%).…”

Using GIS and Remote Sensing in Assessment of Water Scarcity in Nakuru County, Kenya

“…Because of these facts, this research study in Nakuru County, Kenya has been carried out in order to investigate if there is a reason behind decrease or increase of crop yield during different rainfall seasons. A study had been previously carried to show the relationship between economic efficiency and farm size [10] but none has been carried out to show that rainfall quantities is the reason to decrease in crop yields and not the farm size.…”