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Kairu, Dr. Wambugu Stephen
- Estimation of Cost Efficiency of Dairy Farms in Kenya’s Eastern Central Highlands
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Source
International Journal of Innovative Research and Development, Vol 3, No 8 (2014), Pagination:Abstract
The objective of this study was to determine the cost efficiency of dairy cow farms in the Eastern Central highlands of Kenya. The data was collected through a cross-sectional survey from 135 farms in the study region. The sample size was determined using the Fischer’s formula. A stochastic frontier cost function was estimated using the maximum likelihood estimation technique. The MLE results revealed that the costs of roughages and labour were the major determinants of dairy farming cost. The farms operated at low economies of scale, mainly because the land size owned averaged only two acres; where mixed crop-livestock farming was practiced. It was revealed that roughages could substitute with either mineral supplements or labour to reduce farming costs. The mean farms cost efficiency index was 4.4% above the frontier cost. Most farms did not make profits. The average cost per farm was Ksh. 551 while the milk revenue was Ksh.365. It was concluded that farmer-cost inefficiency was not the main cause of the high milk production cost. The cost of feeds coupled with the relatively small land sizes owned and the cost of labour were the main challenges facing dairy farming in the study region. It was recommended that policy makers come up with necessary laws and regulations to ensure that the continued land sub-division is reversed and that the cost of dairy farming inputs is reduced. Researchers require establishing the least-cost combination ratio for roughage and labour.
Keywords
Cost efficiency, milk production cost, stochastic frontierFull Text
- Evaluation of Technical Efficiency of Dairy Farms in Embu County, Kenya
Authors
Source
International Journal of Innovative Research and Development, Vol 3, No 8 (2014), Pagination:Abstract
Dairy farming in Kenya is a major economic activity accounting for 3.5% of the national GDP and contributes to household incomes, food and employment. However, despite Kenya’s long dairy farming history spanning about 100 years, favourable climatic conditions and a 3.5 million national herd, its milk per capita consumption is low (76.7 kg) and export quantities (milk) remain negligible. These observations raised the question of the performance of the farms, particularly their level of technical efficiency. This study evaluated the technical efficiency of dairy cow farms in Embu county of Kenya, using the stochastic frontier approach. Data were randomly collected from 96 farms. The sample size was determined using the Cochran’s (1977) formula. Data were analyzed using the SPSS and Frontier 4.1 c computer softwares. Stochastic frontier production function was estimated using the maximum likelihood estimation technique. The farms were characterized and their technical efficiencies estimated. Results revealed that the number of lactating cows and the amounts of roughages, concentrates, and mineral supplements were the major variables influencing milk output. The dairy animals received inadequate nutrients. The animals kept exceeded the farm’s carrying capacity. The mean farm technical efficiency was 85.5%, implying that milk production could be increased by 14.5% through better use of available resources, given the current state of technology without extra cost. The milk production model coefficient was 1.33. It was recommended that farmers specialize in one agricultural enterprise (dairy or crop farming) resulting from the small land sizes owned. Those choosing dairying, require shifting from the Friesians and Ayrshires to the smaller dairy breeds such as Jerseys. The policy makers require coming up with regulations that encourage enterprise specialization and discourage continued sub-division of agricultural land.Keywords
Technical efficiency, stochastic frontier, smallholder dairy farmingFull Text
- Evaluation of Technical Efficiency of Dairy Farms in Eastern Central Highlands, Kenya
Authors
Source
International Journal of Innovative Research and Development, Vol 3, No 4 (2014), Pagination:Abstract
Despite Kenya’s long dairy farming history spanning about 100 years, favourable climatic conditions and a 3.5 million national herd, milk per capita consumption is low (76.7 kg) and export quantities (milk) to the regional market where its products enjoy preferential access are negligible. These observations raised the question of farm level technical efficiency of milk production. This study evaluated the technical efficiency of dairy cow farms in Embu and Meru counties of Kenya, using the stochastic frontier approach. Data were randomly collected from 135 dairy farms. The sample size was determined using the Cochran’s (1977) formula. Data were analyzed using the SPSS, Frontier 4.1 c and STATA computer softwares, where both descriptive and inferential statistics were derived. Stochastic frontier production function was estimated using the maximum likelihood estimation technique. The farms were characterized and technical efficiency estimated. Results revealed that the number of lactating cows and the amounts of roughages, concentrates, and mineral supplements were the major factors influencing milk output. The dairy animals received inadequate feeds and mineral supplements. The animals were overstocked and underfed in an average two-acre mixed crop-livestock farm. The mean farm technical efficiency was 83.7%, implying that milk production could be increased by 16.3% through better use of available resources, given the current state of technology without extra cost. The milk production model coefficient was 2.11. It was recommended that farmers specialize in either dairy or crop farming. Those choosing dairying, require shifting from the Friesians and Ayrshires to the smaller dairy breeds such as Jerseys. The policy makers should provide legal guidelines to ensure that sub-division of agricultural land is minimized and further, promote both enterprise specialization and approaches that make the farm inputs such as concentrates and mineral supplements affordable.Keywords
Technical and cost efficiency, stochastic frontier, smallholder dairy farmingFull Text