Analysis of Technical efficiency of Irish Potato production in Eldoret East Sub County, Kenya

Abstract

The Irish potato, Solanum tuberosum L., has a longstanding history in human nutrition in Kenya. It holds position three relative to maize and beans as main staples, giving a high potential for the potato production and consumption in the country. However, there is low productivity due to the technical efficiency. The primary objective of this study was to estimate technical efficiency of Irish potato production. The specific objectives were: to investigate the relationship between the farm output and the inputs, given the assumption of a specific technology; to identify the socio-economic factors that affect technical efficiency. The study was done in Ainabkoi Division because it was the major Irish potato production zone in the County. A survey research design was adopted to collect the primary data. Data on socio-economic characteristics of farmers were used. The target population was the Irish potato farmers in Eldoret East Sub County. Data was obtained with the aid of questionnaires which were administered to 105 randomly selected respondents by the researcher with the help of four enumerators recruited by researcher. Stochastic frontiers method was used in this study to analyze the survey data. The first approach, called the two-step approach, first estimated the stochastic frontier production function to determine technical efficiency indicators. Next, indicators thus obtained were regressed on explanatory variables that usually represent the firms’ specific characteristics, using the Ordinary Least Square method. In the stochastic frontiers model, the coefficients and the variance parameters are simultaneously estimated by maximum likelihood method, using Frontier 4.1 software. The analysis revealed that the sum of the partial output elasticities with respect to all inputs was 1.86. This indicated an increasing return to scale in Irish potato production. It further revealed that Irish potato farmers could benefit from economies of scale linked to increasing returns to boost production. The mean technical efficiency index was estimated at 0.789. This meant that farmers have 21.1% scope of increasing the potato production by using current technology. The inefficiency parameter estimate indicated three socio economic and institutional factors (level of education; access to extension; and access to credit) as having significant effect in technical efficiency of Irish potato production. In order to improve technical efficiency, access to extension service should be enhanced by having more extension providers closer to the farmer. This would increase frequency of farmer and extension provider contact. Enabling farmers’ access affordable credit facilities and Capacity building of farmers would also improve the technical efficiency of Irish potato production.