Estimation of profit efficiency of smallholder rice farmers in Uganda: A stochastic frontier approach

Agricultural Technical Efficiency of Smallholder Farmers in Tanzania: A Stochastic Frontier Approach

“…PHL can be on quantity and or quality loss of food whereby quality loss may include inferior nutritional value, foodborne diseases, and economic value loss when the yield misses marker opportunity whereas quantity loss includes a loss that can be quantified with metrics (Sugri et al, 2021). PHL is included in this part since it is considered to be among the key indicators of technical inefficiency among smallholder farmers (Akite et al, 2022). Further, a farming method known as conservation agriculture (CA) can restore degraded soils while preventing the loss of arable land.…”

“…In Pakistan, Ali et al, (2019), investigated technical efficiency in hybrid maize and found that the average TE stands at 84.3% which implies that, Pakistan still has room to increase hybrid maize production output by 15.7% with the same level of inputs. In Uganda, Akite et al, (2022), investigated the rice production profit efficiency with a single-step stochastic profit frontier approach and found that the mean TE was 59% which implies that Uganda has a clear chance to improve its rice production profit by 41% without changing the factor inputs. Similarly, Missiame et al, (2021), conducted a study based on cassava in Ghana and they revealed that the average TE stands at 70.5% with the implication that cassava yield levels could be increased further by 29.5% with the same level of inputs.…”

“…Based on the results of Ahmed & Melesse, (2018), farmers who engage in off-farm activities are associated with higher TE compared to their counterparts. Because most smallholder farmers are poor and rely on household labor, Akite et al, (2022), identified that the use of hired labor has resulted in a decrease in technical efficiency since farmers use a lot of money in labor than other inputs.…”

“…The main objectives of firms based on this theory are cost minimization, output maximization, and profit maximization. In achieving these production goals, a farmer needs to ensure efficiency in the use of inputs that is technological efficiency, allocative and economic efficiency (Akite et al, 2022). The basic properties of a production function are; Monotonicity whereby a monotonic function is a function that is either entirely nonincreasing or nondecreasing, a production is concave, and a production function considers essentiality whereby a positive input is required to produce a positive output (Dijk et al, 2017).…”

“…It takes into account both aspects that the producer cannot control and those that the producer can, making it the favored option by allowing both factors to have an impact on variation between enterprises. Further, this model remains to be the most dominant in explaining farmers' production efficiency (Akite et al, 2022).…”