Profit efficiency in family-owned crop farms in Eastern Cape Province of South Africa: a translog profit function approach

Abstract

Background Farm productivity on smallholder family-owned crop farms remains low despite several interventions to transform agriculture especially in developing countries. Farmers in rural areas face serious constraints that impede their productive capacities for the principal dietary staple, notably maize. Smallholder farmers have access to unprofitable markets that in turn make their enterprises less profitable. Efforts to commercialise smallholder maize production have not yielded desired results. This study, therefore, estimates profit efficiency and its determinants in the smallholder cropping systems in the Eastern Cape Province of South Africa. Methodology A random sample of 158 smallholder maize farmers was selected. A normalised translog profit function was then fitted by means of a one-step estimation of technical efficiency and its determinants using the STATA software. Results The results indicate that cost of fertiliser and area under cultivation for maize were the positive drivers of profitability. Complementarities among resources were very important determinants of profit. Conclusion The study concludes that family-owned farms have a positive effect on crop production. Farm profits rise with cultivated area in maize farms. Therefore, the study recommends that policy favouring smallholder commercialisation would improve farm profits.

Profit Efficiency of Smallholder Maize Farmers in Sagnarigu Municipal of Northern Ghana

“…Agriculture in sub-Saharan Africa is dominated by food crop production (Mujuru et al, 2022), with crop farming contributing immensely to rural development, income and food security and rural livelihoods (Khoza et al, 2019). Maize is an important food crop produced in most parts of Africa, notably among farm households and is the main dietary staple in Ghana and several African countries.…”

“…Maize is an important food crop produced in most parts of Africa, notably among farm households and is the main dietary staple in Ghana and several African countries. The profitability of maize production hinges very much on conditions in the input and output markets (Mujuru et al, 2022), as well as farm and farmer characteristics that influence the level of productivity. Farmers' ability to reduce inefficiency in production and optimise resource-use efficiency are necessary to improve productivity and profitability of maize production.…”

Profit efficiency among kenyan maize farmers

“…An economically rational combination of inputs and outputs is necessary for farmers to be profitable. The right proportions and quality of inputs are crucial to maximizing productivity by utilizing the resources efficiently [ 18 , 19 ]. The efficiency of maize production has received a great deal of attention in recent decades.…”

“…According to Refs. [ [17] , [18] , [19] ], it is only appropriate to measure efficiency in technical or cost terms when a firm's objective is to maximize output or minimize input (cost), not profit. As a result, considering profit frontier functions would be more advantageous, for example, in maize farming in Western Kenya, where input and output prices are largely determined by market prices.…”

Assessing the efficiency level of the “poverty alleviation through agriculture project”: A case study of fixed observation points in China

“…Sole observations of economic expansion have been impeded in many situations, whereas inequalities have remained constant or to some extent even exacerbated (Bardhan, 1996;Liu et al, 2021a). Seemingly, various initiatives have been working to alleviate the tremendous limitations encountered by the poor, and enhancing their conditions can also aid macroeconomic expansion (Macfadyen et al, 2002;Mujuru et al, 2022). The situation may often contradict the conventional theory of economics with the equity-efficiency trade-off, as the efficiency rectifies different allocation costs, such as lower monetary incentives and overall competence (Kerr, 2002;Wongnaa et al, 2019).…”