Department of Agricultural Economics

Permanent URI for this community

https://scholar.sun.ac.za/handle/10019.1/25

Browse

Browsing Department of Agricultural Economics by browse.metadata.advisor "Conradie, Beatrice"

Now showing 1 - 1 of 1
  • Thumbnail Image
    Item
    A stochastic frontier analysis of factors affecting productivity and technical efficiency of dairy farmers in the Kingdom of Eswatini
    (Stellenbosch : Stellenbosch University, 2023-03) Mdluli, Bandile Banele; Greyling, Jan C.; Conradie, Beatrice; Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.
    ENGLISH SUMMARY: Dairy farming is a vital sector for the economy of Eswatini, but the country's low productivity means it still relies on milk imports from neighbouring countries. To assess the level of technical efficiency among local dairy farmers, this study was conducted using Battese and Coelli's stochastic frontier production function model. The research aimed to identify factors influencing technical inefficiency and attempted to test Henderson's two hypotheses explaining the inverse relationship between farm size and productivity. Data were collected from 118 dairy farmers using a structured questionnaire, and a single-stage modelling stochastic production frontier of the translog functional form was used for analysis. The study found that the mean technical efficiency of farmers was 71%, indicating a potential 29% increase in output if resources were used efficiently. All explanatory variables had positive coefficients and were statistically significant. The research segmented the sample into small, medium, and large farmers based on the number of cows in milk to test the technical efficiency hypothesis. The study showed that small farmers were the most efficient (78.5%), followed by medium (75.9%) and large (75.1%) farmers. The research identified that dairy farmers who used hired labour were less efficient than those who used their own or family labour, supporting the labour market imperfections hypothesis. The study found that using a proper record-keeping system was statistically significant in reducing inefficiency. Farmers who used this system had an average technical efficiency of 74.8% compared to those who did not, at 65.5%. The research recommended that the government and dairy development agencies focus on improving labour management training as part of their extension offering, as this would impact efficiency as farm size increases.