Analysis of economic efficiency among smallholder sorghum producers in Kenya

Abstract

This study used Cobb-Douglas Stochastic Profit Frontier to analyze economic efficiency of sorghum farmers in Tharaka Nithi County, Kenya. Using a multi-stage stratified sample of 259 farmers, results depicted a wide range of profit efficiency between the best (0.96) and the worst (0.12) farmer with a mean of 0.17. The actual and potential profit was USD 164.88 ha-1 and USD 969.87 ha-1 respectively. This indicates that, sampled farmers incurred profit-loss of approximately USD 804.99 ha-1. Family labour and fixed capital base were the major contributing factors to sorghum profitability. Drivers of profit efficiency pointed out that, farmers who had more experience in sorghum farming, accessed agricultural credit, attended trainings, lived closer to the market and agro-dealers were likely to be more efficient. To increase profit efficiency, this study therefore advocates for policy strategies targeting these factors. Further, policy move targeting increase in uptake and correct application of fertilizer and other inputs should be reinforced.