Determination of Factors Affecting Technical Efficiency in Smallholders’ Dairy Production in Rwanda:Case of Nyanza District

Abstract

Dairy value chain has an important role in income generation and provision of employment. The latest trends in demand for dairy products is progressively exceeding the supply in the Rwanda and in Nyanza district particularly; this constitute a genesis of discussion and analysis of dairy production situation. Smallholder dairy farming is practiced in Rwanda aiming at generating income and nutrients in households; however, the efficiency in smallholder dairy farming is highly disputed. This study examined factors affecting technical efficiency of smallholder dairy farmers in Nyanza District with estimation of the marginal gross profit of smallholder dairy production.  Stratified random sampling was adopted to determine the respondents. Primary data were drawn from 110 smallholder farmers using structured questionnaires. Non-parametric approach, Gross margin and Stochastic Frontier were employed. The results revealed that socio-economic factors and institutional factors directly affects technical efficiency of smallholder dairy production. The study will help the government and smallholder dairy farmers in organizing themselves in groups for bulk purchases of inputs during high season this will end up reducing unnecessary cost of transporting and price increase of inputs during low season hence increasing milk production

Key words: smallholder dairy farming, stochastic frontier, Technical efficiency, Nyanza District, Rwanda

DOI: 10.7176/EJBM/12-8-03

Publication date:March 31^st 2020