Factors Affecting the Efficiency of Smallholder Cotton Producers in Zambia

Abstract

Agriculture in Sub-Sahara Africa is considered as an engine of economic growth and has the potential to reduce rural poverty of smallholder farmers through increased food security and household income. However, most of Sub-Sahara Africa countries are faced with low agricultural productivity and this has undermined the potential to reduce rural poverty. The study focused on smallholder cotton producers in Zambia. Cotton is grown in Central, Eastern and Southern Provinces of Zambia and is an important cash crop which contributes over $60 million to the economy. It also supports over 150,000 households. However, the productivity of smallholder cotton farmers in Zambia is low, around 800 kg per hectare or less. While in West Africa productivity is over 1000 kg per hectare. Agricultural productivity is defined as a measure of the value of output for a given level of inputs. Efficiency is defined as the actual productivity of a farm relative to maximal potential productivity. This shows that efficiency is related to productivity though it is productivity at maximum or minimum values. The study used the 2008 supplemental survey data collected by the Ministry of Agriculture and Cooperatives, Central Statistics and Food Security Research Project. Using Data Envelopment Analysis (DEA) this study determines the technical, allocative and economic efficiency indices of a sample of 812 (population estimates 150,801) cotton producers in Zambia. Using the Ordinary Least Squares (OLS) regression, the study determines the factors influencing technical, allocative and economic efficiency variations. Results show that the mean technical, allocative and economic efficiency indices in cotton production are 46%, 37% and 20% respectively. This means that Zambian cotton farmers could reduce input use and production cost without altering the output by improving technical and allocative efficiency by 54% and 63% respectively. Female-headed households, number of years spent in school by the household head, leaving crop residues, the value of productive assets and off-farm income are some of the factors found to positively influence the technical, allocative and economic efficiency. The study found that cotton farmers are relatively inefficient and there is room to improve efficiency among smallholder cotton farmers in Zambia. Some socio-economic and farm-specific factors have a positive influence on efficiency. The study recommends that cotton stakeholders should devise strategies of involving more women in cotton production, improve access to productive assets, and encourage adoption of conservation farming crop residue retention as the means to improve cotton production efficiency.