Farm Household Production Efficiency in Southern Malawi: An Efficiency Decomposition Approach

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1 Journal of Economcs and Sustanabl Dvlopmnt ISSN (Papr) ISSN (Onln) Farm Houshold Producton Effcncy n Southrn Malaw: An Effcncy Dcomposton Approach Lawrnc D. Mapmba Dpartmnt of Agrcultural & Appld Economcs, Bunda Collg, Unvrsty of Malaw, P.O. Box 219, Llongw, Malaw, Tl: Emal: l_mapmba@yahoo.com MagangaM. Assa (Corrspondng Author) Dpartmnt of Agrcultural & Appld Economcs, Bunda Collg, Unvrsty of Malaw, P.O. Box 219, Llongw, Malaw, Tl: Tl: , Emal: arthurmaganga@yahoo.com Nlson Mango Intrnatonal Cntr for Tropcal Agrcultur, 12.5 m Pg Mazo Road, Harar, Zmbabw. Tl: , Emal: n.mango@cgar.org Abstract Th prsnt study was st out to stmat producton ffcncy of tomato (Lycoprscon sculntum L) farmrs n th southrn rgon of Malaw s through ffcncy dcomposton. A random sampl of 72 small-scal farmrs was drawn from Balaa dstrct. Th fndngs rvald that farmrs n Balaa dstrct hav opportunty for productvty gans and cost savng. Man tchncal, conomc and allocatd ffcncy wr found to b 0.70, 0.57 and 0.82, rspctvly. Factors l ducaton and crdt accss augmnt tchncal ffcncy whl crdt accss, farmr group mmbrshp and gndr (bng mal) augmnt conomc and allocatv ffcncy. Polcy thrust l lnng small scal farmrs to mcro-fnanc nsttutons for crdt accss, ntnsfyng famly plannng programs to rduc famly szs, organzng small scal farmrs nto groups (coopratvs) and ntgratng womn nto tranng and xtnson programs would ncras producton ffcncy of small-scal tomato farmng n southrn Malaw. Kywords: Dcomposton, Malaw, producton ffcncy, producton frontr, tomato INTRODUCTION Durng th 2000s, Malaw s agrcultur accountd for as much as prcnt of th Gross Domstc Product (GDP), 92 prcnt of ovrall mploymnt, ovr 90 prcnt of th country s forgn xchang arnngs, provdd 64% of total ncom for rural popl and contrbutd 33.6 prcnt to th conomc growth. Agrcultur supports th manufacturng ndustry by supplyng 65% of th raw matrals ndd. A sgnfcant fatur of th Malaw s agrcultur s dualsm n ts structur. Ths dual structur conssts of larg scal farmng, whch ncluds stats sctor, and small scal producton (GoM, 2007 and Damalphtsa t al., 2007). Thr has bn, howvr, ovr-dpndnc on tobacco and maz for forgn xchang arnngs and th provson of food, rspctvly. Tobacco accounts for ovr 70% prcnt of th xport arnngs whras maz occups ovr 70% of th croppd land ara. Both crops, howvr, fac strong turbulnc, tobacco from th ant-smong lobby and maz from th scalatng costs of nputs (Chongw, 2001). Ths ar not just thratnng th survval of ths crops, but th vry foundaton of Malaw s conomy. Thus, altrnatv ntrprss must b born to ta lad n agrcultur, and t gos wth mnton that hortcultural crops may offr th bst avnu. 236

2 Journal of Economcs and Sustanabl Dvlopmnt ISSN (Papr) ISSN (Onln) On hortcultural crop ganng much ntrst n Malaw s tomato (Lycoprscon sculntum L). In Malaw, tomato s usd as food tm on daly bass. It can b consdrd as th most prvalnt of all vgtabls. It s mostly usd as frsh vgtabl and can also b usd for mang a vctor of products as wll. Dclnng forgn xchangs rsrvs would b rscud by rducton n mportaton of tomato products whch can locally b producd. tomato sauc. Ths wll frst rqur an assgnmnt to analyz possbl productvty gans n tomato producton gvn ncrasng populaton growth (NSO, 2008) or dmand and fxd land rsourc. Ths study rolld out to undrta such an assgnmnt manly loong at ffcncy. To th nowldg of th authors, no rsarch has bn don on productvty gans n hortcultur sctor latr solatng tomato crop. It appars th frst wav of rsarch focusd on bg crops l maz and groundnuts (Edrss and Smtow, 2002; Tchal, 2009). Maganga (2012) rolls anothr strand of rsarch on productvty gans n hortcultural crops, but only focus on Irsh potato. Dspt ths xpandng body of ltratur on ffcncy, no study has spcfcally focusd on producton ffcncy n tomato farmng. Thus, th frst objctv of ths study s to stmat producton ffcncy of tomato farmng n th southrn Malaw. In ordr to provd polcy mplcatons, th ffcncy masurmnts wll b dcomposd nto tchncal, allocatv and conomc ffcncs usng stochastc ffcncy dcomposton producton frontr analyss. Fnally, th study attmpts to xplor rlatonshp btwn th producton ffcncy masurs and othr rlvant varabls such as ducaton, houshold sz, land sz, accss to crdt, mmbrshp to farmr organzaton and gndr. It s ssntal to dntfy th sourcs of producton ffcncy n ordr to dsgn prvat or publc polcs to mprov prformanc (Lovll, 1995). METHODOLOGY Thortcal Construct Producton functon s dfnd by Frguson (1966) as a functon that rlats maxmum possbl output to a gvn combnaton of nputs. An output functon stmatd by Ordnary Last Squars rprsnts an avrag rspons and dos not n a sns rprsnt a producton frontr. Th frontr and tchncal ffcncy ltratur dats bac as arly as (1957) by Farrl s wor n hs stmaton of tchncal ffcncy usng dtrmnstc frontr. Ths approach ovrlood random factors byond th farmr s control that can affct th ffcncy of a farm. Consquntly, th approach wnt through som rfnmnts by Agnr t al. (1977) and Musm and Broc (1977) whn thy mployd cross-sctonal data to stmat tchncal ffcncy usng a stochastc frontr modl. Th stochastc lmnt was hypothszd to b compost comprsng of a half normal random rror componnt and on sdd rsdual trm. Th frst accounts for masurmnt rrors n output varabl, wathr and a combnd ffct of unnown nputs on producton. A furthr dpartur from dtrmnstc approach n th body of ltratur ncluds Tmmr (1971), Frrr and Lovll (1990), Fosund (1992) and othrs. Ths paprs show a swtchng from dtrmnstc frontr nto a probablstc frontr functon. Th prsnt study follows Tmmr (1971), Frrr and Lovll (1990), Fosund (1992) and adapts to ffcncy dcomposton mthodology frstly prsntd by Kopp and Dwrt (1982) and xtndd by Bravo-Urta and Rgnr (1991). Th producton tchnology of a farm s rprsntd by a stochastc producton functon spcfd as: Y = f( ; β ) + v u 1 237

3 Journal of Economcs and Sustanabl Dvlopmnt ISSN (Papr) ISSN (Onln) Whr Y dnots th tomato output for farm, s th vctor of nputs or functons of nput quantts usd by th farm, β s a vctor of paramtrs to b stmatd, f ( ; β) s a tru rprsntaton of tomato producton functon, v s th tradtonal stochastc rror trm, th u s ar non-ngatv random varabls assocatd wth tchncal nffcncy n producton, whch ar assumd to b ndpndntly and dntcally dstrbutd, 2 2 N σ and truncatd at zro, of th normal dstrbuton wth man µ and varanc σ u( N( µ, σ u ). 2 (0, u) Th maxmum llhood stmats yld β, = and σ σ v + σ u γ = σ. Followng Jondrow t al. 2 /σ 2 u (1982), th tchncal ffcncy stmaton s gvn by th man of th condtonal dstrbuton of nffcncy trm µ gvn ε; and thus dfnd by: σ σ f( ε jλσ) v u ελ 2 E( uε) =. σ 1 F( ελσ σ Hr, λ = v / σ u, σ σ v σ u σ + = whl f and F rprsnts th standard normal dnsty and cumulatv dstrbuton functon, rspctvly, valuatd at ε λ/σ. Rmovng th nffcncy componnt from quaton 1 ylds Y* = Y u = f( ; β ) u 3 Whr Y* s th obsrvd tomato output of th th farmr adjustd for th stochastc nos v (Bravo-Urta and Rgr, 1991). Ths forms a startng pont for drvng a tchncally ffcnt nput vctor, t, for th farm. Th tchncally ffcnt nput vctor s drvd by smultanously solvng obsrvd output, quaton 4 and th nput ratos ( 1 / = (>1), whr s th obsrvd nput rato. Gvn that quaton 1 s Cobb-Douglass producton functon, t s assumd that t s slf dual. Thus, th dual cost frontr can b drvd algbracally havng th gnral form spcfd as: 4 C = τ(w,y*;φ) Ths rprsnts th mnmum cost assocatd wth tomato producton, W s th nput prc vctor for th farm and φ s a vctor of paramtrs to b stmatd. Th conomcally ffcnt nput vctor s found by applyng Shphard s lmma and substtutng frm s nput prcs and adjustd output lvl Y* nto th rsultng lvl of nput dmands ylds C 5 = ( W, Y* ; φ) W Whr, rangs from 1 to m nputs, φ s paramtr vctor to b stmatd. Wth obsrvd lvl of output, th 238

4 Journal of Economcs and Sustanabl Dvlopmnt ISSN (Papr) ISSN (Onln) tchncally and conomcally ffcnt costs of producton ar qual to t W and W, rspctvly. Whl th actual opratng nput cost of th farm s comput th tchncal (TE) and conomc ffcncy (EE) ndcs as follows; W. Th thr cost masurs can thn b usd to 6 W TE = W t 7 W EE = W Th combnatons of quatons (6) and (7) s usd to obtan th allocatv ffcncy (AE) ndx followng Farll (1957) as 8 W AE= W t Economc ffcncy of th farm ( W -W ) can b dcomposd nto ts tchncal ( W -W ) and allocatv ( W -W ) componnts. t t Emprcal Modl Sttng out to analyz tchncal, conomc and allocatv ffcncs, th followng producton functon was stmatd; 9 lny = β 0 + β 1 (LAND) + β 2 (LABOUR) + β 3 (FERT) + β 1 (SEED) + (v u ) Whr, Y s tomato output n g, LAND s total land sz n hctars commttd to tomato producton, LABOUR s usd n a producton sason masurd n man-days, FERT s norganc frtlzr appld to tomato n gs, SEED s th quantty of sd n numbr of sd pacts, and β, v and u ar as dfnd arlr. Th cost mnmzng problm n quaton 10 s th bass for drvng th dual cost frontr, gvn th nput prcs W, paramtr stmats of th stochastc frontr producton functon, βˆ and adjustd output lvl, 10 mn C = W 4 = 1 * 11 Subjct to Y = Aˆ βˆ * Y. 239

5 Journal of Economcs and Sustanabl Dvlopmnt ISSN (Papr) ISSN (Onln) Whr  = xp( ˆo β ). Substtuton of th cost mnmzng nput quantts ylds th followng dual cost functon: 12 4 * ( *, ) = ψ µ = 1 C Y W Y W α Whr, α µ ˆ β =, ˆ 1 µ = ( β ), Th nput prcs, W, ar avrags of obsrvd prcs pr unt of th nputs usd. Dscovrng whthr farms ar ffcnt mght not b mportant xrcss unlss an addtonal ffort s mad to dntfy th sourcs of th nffcncs. Tang cognzanc of ths, th study nvstgatd th sourcs of plot-lvl nffcncs for th survyd farmrs. Emprcally, th nffcncy modl u s spcfd as; 13 u = ϖ 0 + ϖ rz 9 r= 1 r Whr, z r s a vctor of farm spcfc dtrmnants of conomc nffcncy, ϖ s a vctor of nffcncy paramtrs to b stmatd. Data Ths study usd th cross-sctonal houshold survy data from Malaw collctd durng th 2009/2010 croppng sason from a random sampl of 72 tomato producrs n Balaa dstrct n southrn Malaw. Houshold lvl data wr valdatd usng Focus Group Dscussons n th sampld communts. Balaa dstrct covrs an ara of 2,193 m² (BDA, 2003). Rsults and Dscusson A basc summary of th valus of th y varabls usd n ths study s prsntd n Tabl1. An avrag farmr showd that thy had 15 yars of farmng, 4 yars of formal ducaton and wr 39 yars of ag. Tomato producton was domnatd by mal farmrs (77%). Th fgurs ar on pr farm bass. Th avrag tomato productvty pr farm was 19t/ha. Th ara undr tomato for th sampld farmrs vard from a vry small farm of 0.2ha to a larg farm of 2 ha. Labour us was low wth a man valu of 15 prson-days. Th avrag numbr of sdlngs plantd pr hctar was Crdt accss s vry low n th ara. Only 34% of farmrs had accss to crdt. Ths could prhaps b attrbutd to low lvls of farmr group mmbrshps. Farmr group mmbrshp was as low as 33%. Th maxmum-llhood stmats of th paramtrs n th Cobb-Douglass stochastc frontr producton functon ar prsntd n Tabl 2. Th paramtrs for land, labour, frtlzr and sd wr postv and sgnfcant as xpctd. In addton, th Wald ch-squar statstc for jont tst of th modl ndcats that th modl s sgnfcant (p <0.01), ovrly. Th stmatd valus for th varanc paramtrs wr sgnfcant and ndcatd that tchncal ffcncy had an mpact on th total valu of tomato producton. Th gamma (γ = 0.93) shows that 93% of th varablty n th output of tomato farmrs that ar unxpland by th functon s du to conomc nffcncy. Ths suggstd that a convntonal producton functon was not an adquat rprsntaton of th data. 240

6 Journal of Economcs and Sustanabl Dvlopmnt ISSN (Papr) ISSN (Onln) Th dual cost frontr of quaton 14 s drvd from maxmum-llhood stmats of frontr producton functon for Tabl 2 yldng: (14) lnc = lnW lnW lnW lnW Y* Whr, C s th producton cost of tomato, W 1, W 2, W 3 and W 4 ar land rnt, wag rat, frtlzr cost and sd cost, rspctvly, adjustd for any statstcal nos. Effcncy Scors Th frquncy dstrbuton of tchncal, conomc, and allocatv ffcncy stmats wr summarzd and prsntd n Fgur 1. Th tchncal ffcncy stmats rang from 0.41 to 0.98 wth a man of 0.70 mplyng that th farmrs hav lbral opportunts to ncras thr tchncal ffcncy. Th rsult ndcats that th most tchncally nffcnt farmr would hav an ffcncy gan of prcnt drvd from (10.41/0.98) 100 to attan th lvl of th most tchncally ffcnt farmr. Th conomc ffcncy stmats rang from 0.27 to 0.86 wth a man of 0.57 mplyng that th farmrs hav suffcnt opportunts to ncras thr conomc ffcncy. Th rsult ndcats that th avrag tomato farmr would njoy a cost savng of about prcnt drvd from (1-0.57/0.0.86) 100 to attan th lvl of th most ffcnt farmr. Th allocatv ffcncy rangd from 0.49 to as hgh as 0.98 whl havng a man of Th rsult ndcats that an avrag tomato farmr would njoy a cost savng of about prcnt drvd from (1-0.78/0.99) 100 to attan th lvl of th most ffcnt farmr. Sourcs of Effcncy Gans Th major ntrst bhnd masurng tchncal ffcncy lvl s to now what factors dtrmn th ffcncy lvl of ndvdual farmrs. Varous hypothszd varabls that ar xpctd to dtrmn ffcncy dffrncs among farmrs wr stmatd usng quaton 13. Th rsults ar prsnts n Tabl 3. Educaton s a varabl that s xpctd to sharpn managral nput and lad to a bttr assssmnt of th mportanc, and complxts, of good dcsons n farmng. Educaton nhancs th ablty of farmrs to s, dcod and ma good us of nformaton about producton nputs, thus mprovng th ffcncy n nput us. Th coffcnt of yars of xposur to ducaton had ngatv stmatd coffcnt that wr sgnfcantly dffrnt from 0 (p<0.1) for tchncal ffcncy and postv stmatd coffcnt that wr sgnfcantly dffrnt from 0 (p<0.05) for allocatv ffcncy. Farmrs ducaton ncrasd tchncal ffcncy of th tomato farmrs. Earlr studs by Awudu, t al., (2001) and Abdula and Ebrln (2001) n thr studs on tchncal ffcncy n Ncaragua stablshd that ducaton ncrasd producton ffcncy. Farmrs conomc ffcncy was nutral to ducaton lvl. Famly labor consttuts th major labor supply to th farm. Th sz of conomcally actv famly mmbrs wthn a gvn farmng houshold affcts th crop producton actvts. Thus, a larg famly sz would manag crop plots on tm. Th study rportd postv rlatonshp btwn famly sz and tchncal and allocatv ffcncy though not convntonally sgnfcant. Howvr, t showd ngatv rlatonshp wth conomc ffcncy for whch th mpact was sgnfcant (p<0.01) on th lattr. In ths study, farmr xprnc was accumulatd numbr of yars n tomato producton whch bulds along wth 241

7 Journal of Economcs and Sustanabl Dvlopmnt ISSN (Papr) ISSN (Onln) t slls and ablts. Wth xprnc, th farm managr s abl to vad prvous flows, and dntfy th rght mx of nputs to maxmz output and profts. To th contrary, ths study rportd oppost rlatonshp btwn farmrs farm xprnc and tchncal and conomc ffcncy. Howvr, farm xprnc only had sgnfcant ffct on tchncal (p<0.05) and conomc (p<0.1) ffcncs. Th rsult dos not corroborat that of Onynwau and Nwaru (2005), Onynwau, t al. (2004) and Kalrajan (1981). Onynwau and Ooy (2007) nots that mor xprncd a farmr s th mor ffcnt hs dcson mang procsss and th mor h wll b wllng to ta rss assocatd wth th adopton of nnovatons. Land sz s xpctd to ncras producton ffcncy through ncrasd scal conoms. Howvr, th prsnt study found an nvrs and sgnfcant (p<0.01) btwn tchncal ffcncy and land sz (small s bautful). Smlarly, Bag (1982) stmatd a Cobb-Douglas producton functon for thr groups of Indan farms, ncludng a sz dummy (basd on land) both addtvly and ntractvly wth th rst of th nputs. H found that, gvn a lvl of nputs, small farms producd mor output than larg farms Accss to crdt can b an mportant sourc of farm busnss fnancng n dvlopng agrcultural conoms. Hghr accss to crdt, n ths study, ncrasd tchncal, allocatv, and conomc ffcncy postvly (p<0.01). In prvous studs, O t al. (2001) found postv rlatonshp btwn conomc ffcncy and crdt accss. Th bauty of accss to crdt ls n outward shftng of th farm budgt constrant, nablng tmly purchas of nputs, f t s accssd on tm. Mmbrshp to farmr organzaton hlps to rduc producton costs as farmrs may us th opportunty of purchasng nputs n bul. Th varabl postvly dtrmnd conomc and allocatv ffcncy and wr sgnfcant (p<0.5). Smlarly, gndr of th farmr only ncrasd conomc and allocatv ffcncy (p<0.01). CONCLUSION AND POLICY IMPLICATIONS Ths study drvd th producton (tchncal, conomc and allocatv) ffcncy ndcs for tomato farms n th Balaa dstrct of Malaw by usng ffcncy dcomposton from Cobb Douglas producton frontr. Th man tchncal, conomc and allocatv ffcncs of farms wr 0.70, 0.57 and 0.82, rspctvly, ndcatng that thr ar opportunts to gan substantal addtonal output or dcras nputs, gvn th xstng tchnology of tomato farmrs n th rsarch ara. Farm lvl xplanatory varabls wr usd to xplor nffcncy dtrmnants. Th nffcncy ffct modl showd that factors such as ducaton and accss to crdt augmntd tchncal ffcncy whl farmng xprnc, land sz showd a ngatv rlatonshp wth tchncal ffcncy. Economc ffcncy was postvly affctd by houshold sz, accss to crdt, farmr groups and gndr whl bng undrmnd by farm xprnc. Allocatv ffcncy was drctly rlatd to crdt, farmr groups and gndr (bng mal). Basd on th rsults, th authors of ths study propos stratgs such as lnng farmr to mcro-fnanc nsttutons for crdt, ntnsfy famly plannng programs to rduc famly szs, organz farmrs nto groups (coopratvs), ntgratng womn nto th tranng and xtnson programs n ordr to ncras th producton ffcncy of tomato farms n th Balaa dstrct. REFERENCES Abdula, A. and Ebrln, R, (2001). Tchncal Effcncy Durng Economc Rform n Ncaragua: Evdnc from houshold survy data. Econ. Syst. 25:

8 Journal of Economcs and Sustanabl Dvlopmnt ISSN (Papr) ISSN (Onln) Agnr, D.J. Lovll, CAK. and Schmdt, P. (1977). Formulaton and Estmaton of Stochastc Frontr Producton Functon Modls. Journal of Economtrcs. 6(1), July, pp Awudu, A. and Ebrln, R. (2001). Tchncal Effcncy durng Economc Rform n Ncaragua: Evdnc from Farm Houshold Survy Data. Economc Systms, 25: Bag, F.S. (1982). Rlatonshp btwn farm sz and tchncal ffcncy n Wst Tnnss agrcultur. Southrn J. Agrc. Econ. 14, Balaa Dstrct Assmbly (BDA). (2003). Balaa Dstrct Soco-conomc Profl. dstrct soco-conomc profl Bravo-Urta, B.E. and Rgr, L Dary Farm Effcncy Masurmnt Usng Stochastc Frontrs and No-classcal Dualty. Amrcan Journal of Agrcultural Economcs 73: Chongw, E.H. (2001). Producton, Martng and Invstmnt Potntal of Hortcultural Crops n Malaw. Mnstry of Agrcultur, Dpartmnt of Crop Producton. Damalphtsa, A.M., Kaunda, E.K.W., Mawnda, B., Sulwa, J. and Chlongo, T. (2007). Analyss on agrcultur polcy. Rport submttd to th Malaw la basn programm (MLBP). Edrss, A.K., Smtow, F Tchncal ffcncy n groundnut producton n malaw: An applcaton of a frontr producton functon. UNISWA Journal Farll, M.J. (1957). Th Masurmnt of Producton Effcncy. Journal of Royal Statstcal Socty, Srs A. (Gnral), Part 3, Vol. 120, pp Frrr, G. and Lovll, K.C.A. (1990). Masurng Cost Effcncy n Banng: Economtrc and Lnar Programmng Evdnc, Journal of Economtrcs. 46: Frguson, C.E. (1966). Producton, Prcs and th Thory of Jontly-Drvd Input Dmand Functons. Economca, Nw Srs. Vol. 33: Forsund, F. (1992). A Comparson of Paramtrc and Non-Paramtrc Effcncy Masurs: Th Cas of Norwgan Frrs. Journal of Productvty Analyss, 3(1):25-44 GoM (Govrnmnt of Malaw). (2007). Economc rport. Mnstry of conomc plannng and dvlopmnt, Llongw, Malaw. Jondrow J, Lovll, K.C.A., Matrov, I.S., Schmdt, P. (1982). On th stmaton of tchncal nffcncy n th stochastc frontr producton functon modl. J. Econ., 19: Kalrajan K. (1981) An Economc Analyss of Yld Varablty n Paddy Producton. Canadan Journal of Agrcultural Economcs, 29(3): Kopp, R.J. and Dwrt, W.E. (1982). Th Dcomposton of Frontr Cost Functon Dvatons nto Masurs of Tchncal and Allocatv Effcncy, Journal of Economtrcs 19: Lovll, C.A.K., (1995). Economtrc ffcncy analyss. Europan Journal of Opratonal Rsarch, 80: Maganga, A.M., (2012) Tchncal ffcncy and ts dtrmnants n rsh potato producton: vdnc from Ddza Dstrct, Cntral Malaw. Afrcan journal of agrcultural rsarch, 7(12), Musn N, Van D, Broc J (1977). Effcncy Estmaton from Cobb Douglas Prodducton Functon wth compost Error. Int. Econ. Rv., 18(2): Natonal Statstcal Offc (NSO) (2008) Populaton and housng cnsus. Prlmnary Rport. Zomba, Malaw. O, I., Jabbor, M.A., Manyong, V., Smth, J.W., Anwum, J.A. and Ehu, S.K. (2001). Agrcultural Intnsfcaton and Effcncy n Wst Afrca Savannahs: Evdnc from Northrn Ngra. Soco-conomc and Polcy Rsarch Worng Papr 33. ILRI, Narob. Onynwau C. E. and Nwaru, J. C. (2005). Applcaton of Stochastc Frontr Producton Functon to th 243

9 Journal of Economcs and Sustanabl Dvlopmnt ISSN (Papr) ISSN (Onln) Masurmnt of Tchncal Effcncy n Food Producton n Imo Stat, Ngra, Ngran Agrcultural Journal, Vol. 36: Onynwau, C.E. Igw, K.C and Mbanasor, J.A (2004). Applcaton of a Stochastc Frontr Producton Functon to Yam Producton n Nasarawa Stat, Ngra. Journal of Sustanabl Tropcal Agrcultural Rsarch, Vol. 13: Onynwau, C. E and Ooy, B. C. (2007). Tchncal Effcncy of Small-Holdr Cocoyam Farmrs n Anambra Stat, Ngra: A Translog Stochastc Frontr Producton Functon Approach. Intrnatonal Journal of Agrcultur 9: 1 6. Tchal, H. and Saur, J. (2007). Th ffcncy of maz farmng n Malaw: A bootstrappd translog frontr. Cahrs d économtsocologrurals, n Tmmr, C.P. (1971). Usng a Probablstc Frontr Producton Functon to Masur Tchncal Effcncy. Journal of Poltcal Economy. 79(4): Tabl 1: Dfnton of varabls and dscrptv statstcs Varabl Unts Avrag Mnmum Maxmum Ag Yars Educaton Yars Farmng Exprnc Yars Land sz Hctars Land rnt Imputd cost of land Extnson vst No. of vsts Frtlzr Kg/ha Prc of frtlzr Malaw wacha/g Labour Prson-days/ha/yar Wag rat Prc of labour/month Tomato yld t/ha Tomato prc Malaw wacha/g Houshold sz No of prsons Sd prc Malaw Kwacha/pact Sd quantty Sdlngs/ha Gndr of houshold had 1=Mal; 0 =othrws Hos Numbr of hos Cost of hos Total cost of hos Crdt status 1=accss 0 = othrws Farmr organzaton 1=ys; 0 = Othrws mmbrshp USD = 150 Malaw Kwacha (MK) 244

10 Journal of Economcs and Sustanabl Dvlopmnt ISSN (Papr) ISSN (Onln) Tabl 2: Maxmum Llhood Stochastc Producton Frontr Output Varabl Coffcnt Std. Error p> z Ln(LAND) Ln(LABOUR) Ln(FERT) Ln(SEED) Constant Total varanc (σ 2 ) Varanc rato (λ) Log-llhood functon Wald ch2(4) Sourc: Computd from STATA 11 MLE/Survy data, *, ** and *** = Sgnfcant at 10%, 5% and 1% rspctvly Tabl 3: Inffcncy Effcts Dtrmnants Inffcncy coffcnt Varabl Tchncal Economc Allocatv Educaton lvl (-1.67)* (-0.851) (0.679)** Houshold sz (0.041) 0.292(0.105)*** (0.007) Farmng xprnc (0.012)** 0.004(.002)* 0.002(0.001) Land sz 0.279(0.683)*** (.159) (4.048) Accss to crdt (0.014)*** (0.096)*** (0.0643)*** Mmbrshp to farmr group ( ) -0.44(.0215)** (0.201)** Gndr 0.232(0.311) -0.49(0.25)*** (0.019)* Intrcpt 1.412(0.448)** 1.68(1.473) (0.254)*** Not: *** = sgnfcant at 10 prcnt lvl; ** = sgnfcant at 5 prcnt lvl; * = sgnfcant at 1 prcnt lvl, (.) = standard rrors. Fgur 1: Effcncy Dstrbuton for Tomato Farmrs Frquncy (Numbr of farmrs) Tchncal Effcncy Economc Effcncy Allocatv Effcncy 245

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