Economic Efficiency of Small-Scale Sunflower Farmers in Tanzania: A Stochastic Profit Frontier Approach

Abstract

Globally, the demand for sunflower vegetable oil has been increasing annually. Smallholder farmers, who represent a relatively large proportion of sunflower seed production, continue to face challenges of low productivity. Although several studies have examined factors contributing to this low productivity, rigorous empirical evidence on the economic efficiency of sunflower farmers remains limited. Understanding economic efficiency is crucial for designing appropriate interventions to increase sunflower seed productivity. An increase in productivity is expected to improve farmers’ income and ensure a sustainable supply of sunflower seeds in the country. This study investigates the factors influencing economic efficiency in sunflower production by employing stochastic profit frontier analysis. Secondary data from the NSCA 2019/20 survey, covering a total of 632 households, were used for analysis. The findings indicate that the average economic efficiency score of sunflower producers is 45.31%, implying that farmers are economically inefficient and have significant potential to improve resource use. The results further show increasing returns to scale (0.1196), suggesting that scaling up input use could enhance productivity. Key determinants of economic efficiency include farm size (1.0485), family labor (0.2000), and seed cost (0.1662). This study concludes that sunflower smallholder farmers have scope to improve efficiency through increased farm size and greater utilization of family labor in the production process.