Farm Size and Productive Efficiency: Lessons from Smallholder Farms in Embu District, Kenya

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This paper examines the effect of farm size on the productive efficiency of smallholder farms in a land. scarce Embu district of Kenya. In particular, the study seeks to establish the relationship between farm size and three components of productive efficiency, namely technical, scale and allocative efficiency. We use data envelopment analysis (DEA) to generate input oriented measures of productive efficiency from a 2004 cross-sectional survey data collected over 120 smallholder farms. The results suggest that gains from improving technical efficiency exist in all farm categories, although they appear to be much higher on large and on medium farms than on small farms. While small farms tend to use land more intensively in an attempt to alleviate land constraints, the study suggests that the relatively higher level of technical efficiency observed on small farms is largely attributable to the adoption of traditional land saving techniques rather than the use of modern land saving technologies. On the other hand, scale inefficiency is found to account for a larger share of technical inefficiency on small farms than on medium and on large farms, suggesting that increasing the scale of operation is necessary if the households have to improve technical efficiency. Likewise, small farms are found to be less allocatively efficient than medium and large farms. Nevertheless, gains from improving allocative efficiency exist in more than 90% of the sample households. Accordingly, measures aimed at reducing labour congestion on the farms, relaxing liquidity constraints, and improving the functioning of land rental markets can significantly improve productive efficiency.
九州大学の論文

Farm Size and Productive Efficiency: Lessons from Smallholder Farms in Embu District, Kenya

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