Technical and Allocative Efficiency of Smallholder Dairy Farmers in Swaziland

Abstract

The objectives of the study were to describe the socioeconomic characteristics of smallholder dairy farmers; estimate the technical and allocative efficiency of smallholder dairy farmers in Swaziland, and to identify factors affecting the technical and allocative efficiency of smallholder dairy farmers. This study used a descriptive quantitative survey to analyse data from a sample of 111 smallholder dairy farmers. Purposive and random sampling techniques were used to select the farmers. Data were analysed using descriptive statistics and econometric analysis (Stochastic Production and Cost Frontier Functions). The average levels of TE and AE for the farmers were 66% and 78% respectively. The availability of water for irrigating pastures, pasture size, soil fertility of pastures, the dairy farming experience, training on dairy farming, distance to the market, farmer’s age, credit access, household size and herd size contribute to the explanation of variations in the TE and AE of the dairy farmers. The study concludes that smallholder dairy farmers were relatively technically and allocatively efficient, however, there is still a 34% and 22% potential to improve the TE and AE levels respectively. The study recommends that soil testing should be done by farmers in order to improve efficiency. There is a need for financial institutions to consider advancing credit to dairy farmers. The SDB should strengthen their technical training through the extension officers in order to encourage efficient use of input resources.

Keywords: Allocative efficiency, dairy farmers, technical efficiency,