A stochastic frontier approach to technical efficiency analysis of smallholder dairy farmers in Swaziland

Abstract

The Swazi nation is traditionally an agricultural nation with almost every homestead on Swazi Nation Land(SNL) keeping a variety of livestock for beef and milk. The country has potential to produce more milk but stillimports 85% of milk from South Africa. The study evaluated the technical efficiency and constraints of the milksupply chain. A descriptive quantitative research design was used in the study and data were collected in 2014using structured questionnaires. The data were collected from 93 farmers, 16 retailers and 1 processor. Data wereanalysed using descriptive statistics, Cobb Douglas function, and Tobit regression model. There were 73.1%males farmers and 50.5% had between 8-14 years of formal education. All the farmers fed their cows with forageand 97.8% used concentrates. The efficiency analysis results indicated that frequency of extension visit and ageof the farmer were negatively associated with technical efficiency, while market information positively affectedefficiency. The technical efficiency mean was 78.2%. This indicates that overall, there is potential to increaseefficiency among dairy farmers by 21.8%. Farmers had problems of scarcity of grazing lands, high feed costs,unavailability of inputs and shortage of water and labour. There is a need for improving extension service,encouraging cooperatives and improving producer’s price of milk in order to enhance productivity and efficiencyof farmers.Keywords: Dairy farmers, Swaziland Dairy Board, supply chain of milk, technical efficiency, stochastic frontierapproach.