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Trends in Agricultural Economics
  Year: 2016 | Volume: 9 | Issue: 1-3 | Page No.: 13-20
DOI: 10.3923/tae.2016.13.20
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Measuring Technical Inefficiencies in Small-scale Small Stock Production in Dr. Ruth Segomotsi Mompatsi District, North-West Province, South Africa

J.N. Lekunze and U. Luvhengo

Background and Objective: Controversies surrounds the term “Small scale” in South Africa because it is associated with backward, non-productive, non-commercial, subsistence, inefficiencies in production by farmers. Small scale agricultural are vital because they generate employment and income in rural regions of the country. The economic performance is therefore crucial because it is only good economic performance in production that can ensure the businesses continue performing their aforementioned vital role. However, studies on the technical efficiencies of these type of production at a local level in the country is lacking as similar studies have focussed on large scale commercial production. The objective of this study was to measure the level of technical inefficiencies amongest small scale small-stock farmers and hypothesised that socio-economic factors do not contribute to inefficiency of small-stock farmers. Materials and Methods: A total of 300 land reform small-stock farmers out of a total population of 1554 in which 330 are land reform farmers were interviewed using structured questionnaires. The stochastic frontier production model was used to analyse levels of technical efficiencies among sample farmers. Results: Regression analysis reveals educational level, experience in small-stock production, access to transport, government support through extension services and educational levels were the most significant values. The average technical efficiency of famers was at 75% indicating that the average farmer could save 22.6% of costs and the most technical efficient could realise a 91.75%. The presence or absence of technical efficiency was tested using the log likelihood in the half normal model function (σ2) and the estimate was 0.422 which significantly differs from zero. The estimated lambda (λ) was 0.9999 indicating differences between actual (observed) and computed output suggesting that 99.99% of the variation in small-stock output in the district is due to socio-economic factors rather than differences in technical inefficiencies of farmers and therefore rejects the null hypothesis. Conclusion: The study reveals that farmers are producing below the production frontier and there is room for improvements if access to resources and special training targeting women are implemented. Furthermore, for small-stock farmers in the study area to become efficient, they will have to increase the amount of input used, while at the same time reallocating their existing inputs until a point where the marginal value product is equivalent to the marginal costs of that particular input.
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How to cite this article:

J.N. Lekunze and U. Luvhengo, 2016. Measuring Technical Inefficiencies in Small-scale Small Stock Production in Dr. Ruth Segomotsi Mompatsi District, North-West Province, South Africa. Trends in Agricultural Economics, 9: 13-20.

DOI: 10.3923/tae.2016.13.20






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