Technical Efficiency of Fertilizer Adoption and Smallholder Maize Productivity in Kenya. Stochastic Frontier Analysis

Abstract

Empirical studies indicate that in Kenya, the adoption rates of inorganic fertilizers, irrigation systems, hybrid seeds, and agricultural extension services remain limited. This shortfall results in lower maize yields, decreased agricultural earnings, and ongoing food insecurity within the nation. This study aimed to assess the technical efficiency of chemical fertilizer usage and determine the scale elasticity and cost flexibility in maize production within Kenya. Technical efficiency scores were computed using stochastic frontier analysis. The analysis employed output-oriented technical efficiency with a truncated normal distribution. The results showed low output elasticities, indicating that maize producers experience diminishing returns to scale and diseconomies of scale. The results suggest that current maize production is characterized by escalating costs of chemical fertilizer use, potentially leading to reduced usage, improper application, or being adversely affected by abiotic factors like climate change, including flooding and prolonged droughts. The study revealed a mere 11 percent technical efficiency in Kenya's agricultural sector, underscoring the urgent need to re-emphasize the implementation of the Agricultural Sector Transformation and Growth Strategy 2019 to improve technical progress, with literature also advocating for commodity-free trade of enhancing producer and consumer welfare in a Pareto optimal fashion.

Key words: stochastic frontier analysis, technology adoption, maize productivity, fertilizer use in Kenya and technical efficiency.

DOI: 10.7176/JESD/14-17-08

Publication date: December 30^th 2023