A stochastic frontier analysis of factors affecting productivity and technical efficiency of dairy farmers in the Kingdom of Eswatini

Date
2023-03
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Publisher
Stellenbosch : Stellenbosch University
Abstract
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.
AFRIKAANSE OPSOMMING: Suiwelboerdery is 'n noodsaaklike sektor vir die ekonomie van Eswatini, maar die land se lae produktiwiteit beteken dat dit steeds afhanklik is van melk-invoere van buurlande. Hierdie studie is uitgevoer om die vlak van tegniese doeltreffendheid onder plaaslike suiwelboere te beoordeel met behulp van Battese en Coelli se stogastiese voorpuntproduksiefunksiemodel. Die navorsing was daarop gemik om die faktore wat tegniese oneffektiwiteit beinvloed, te identifiseer, asook om Henderson se twee hipoteses wat die omgekeerde verhouding tussen plaasgrootte en produktiwiteit te toets. Data is ingesamel van 118 suiwelboere met behulp van 'n gestruktureerde vraelys, en die data ontleed met ‘n stogastiese voorpuntproduksiefunksie van die translog-funksionele vorm is gebruik. Die studie het bevind dat die gemiddelde tegniese doeltreffendheid van boere 71% was, wat 'n potensiele toename van 29% in uitset aandui as hulpbronne doeltreffend gebruik sou word. Alle verklarende veranderlikes het positiewe koeffisiente gehad en was statisties beduidend. Die studie het die steekproef in klein, medium en groot boere verdeel op grond van die aantal koeie in melk om die tegniese doeltreffendheidshipotese te toets. Die studie het getoon dat klein boere die mees effektief was (78.5%), gevolg deur medium (75.9%) en groot (75.1%) boere. Die navorsing het geidentifiseer dat suiwelboere wat gehuurde arbeid gebruik, minder doeltreffend was as die wat hul eie of familie-arbeid gebruik het, wat die hipotese van arbeidsmarkonvolmaakthede ondersteun. Die studie het bevind dat die gebruik van 'n behoorlike rekordhoudingstelsel statisties beduidend was in die vermindering van oneffektiwiteit. Boere wat hierdie stelsel gebruik het, het 'n gemiddelde tegniese doeltreffendheid van 74.8% gehad in vergelyking met die wat nie, teen 65.5%. Die navorsing het aanbeveel dat die regering en suiwelontwikkelingsagentskappe fokus op die verbetering van arbeidsbestuur-opleiding as deel van hul uitbreidingsaanbod, aangesien dit die effektiwiteit sal beinvloed as plaasgrootte toeneem.
Description
Thesis (MAgric) --Stellenbosch University, 2023.
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