Resource Use Efficiency of Potato Production among Smallholder Irrigated Farmers in the Eastern Cape Province of South Africa
Abstract
:1. Introduction
2. Methodology
2.1. Theoretical and Conceptual Framework: Production Theory and Efficiency Theory
- is the observed potato output (dependent variable).
- is a vector of inputs, including land, labour, capital, technology, and other relevant factors (independent variables).
- is a vector of parameters to be estimated.
- is the functional form representing the production technology or production function.
- is the random error component representing inefficiency.
- Exp is the efficiency term, which varies between 0 and 1, where 1 represents perfect efficiency (no inefficiency).
2.2. Description of the Study Area
2.3. Sampling Procedure, Frame, and Sample Size
2.4. Data Collection
2.5. Data Analysis
2.5.1. Gross Margin Analysis
- GM—means gross margin per potato irrigated farmer.
- TR is the total revenue from the production of potatoes i measured in terms of:
- TVC, which is the total variable cost of the production of potatoes i, measured in terms of direct and indirect costs. This includes transport, water, hired labour, seeds, chemicals, and fertilisers.
2.5.2. Model Specification
2.6. The Data
3. Results and Discussion
3.1. Socioeconomics and Distribution of Farm Characteristics
3.2. Descriptive Production Function
3.3. Profitability of Smallholder Potato Farmers
3.4. Distribution of Technical Efficiency of Potato Enterprise
3.5. Profit Efficiency and Inefficiency Estimates of Potato Enterprise
3.6. Technical Inefficiencies of Potato Enterprise
3.7. Return to Scale
3.8. Challenges Faced by Smallholder Potato Farmers
4. Conclusions and Recommendations
4.1. Conclusions
4.2. Recommendations
4.3. Limitations
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Acknowledgments
Conflicts of Interest
References
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Variable | Description | Measuring Type | Expected Priori |
---|---|---|---|
Gender | The sex of the farmer (male/female) | Dummy | +/− |
Age | Age of the farmer in years | Continuous | +/− |
Family size | Number of the family household of the farmer | Continuous | + |
Farm size | Land area under cultivation by the farmer | Continuous | + |
Occupation | Is farming the main occupation for the farm (self-employed, employed by the government) | Dummy | +/− |
Education | Number of years spent in school by the farmer | Continuous | + |
Marital status | The marriage status of the farmer (married/single/window) | Dummy | +/− |
Household monthly income | This is the household monthly income in Rands (farm income, grants, and remittances) | Continuous | + |
Irrigation member | Is the farmer a member of an irrigation scheme | Dummy | + |
Mode of acquisition of land | The mode of acquisition | Dummy | + |
Irrigation | Whether or not the farmer applied irrigation | Dummy | + |
Total Labour Intensity | Number of persons employed | Continuous | + |
Family Labour Intensity | Family members working per unit of land cultivated | Continuous | + |
Fertiliser | Quantity of inorganic fertiliser used on potato (kg) | Continuous | + |
Cost of tractor | Amount paid (hired) for tractors to prepare and spray cultivated land (Rand) | Continuous | + |
Cost of land | Amount paid (rent) for the land under cultivation (Rand) | Continuous | + |
Cost of seed | Total expenditure on seeds (Rand) | Continuous | + |
Cost of pesticides | Total expenditure on pesticides (chemicals) (Rand) | Continuous | + |
Cost of labour | Amount paid for use of labour | Continuous | + |
Total Revenue | Total amount realized from sales of output | Continuous | + |
Total Variable Costs | Total amount from the inputs used in the farm | Continuous | + |
Value of Output | Market value of physical potato output | Continuous | |
Access to Extension | Frequency of Extension Visits | Continuous | + |
Access to credit | Availability of accessible credit (yes/no) | Dummy | +/− |
Member of farm organisation | Is the farmer a member of a farm organisation | Dummy | + |
Variable | Sample Size | Units | Mean | Standard Deviation | Minimum | Maximum |
---|---|---|---|---|---|---|
Gender: Male | 150 | Dummy, 1 = male, 0 otherwise | 0.74 | 0.52 | 0 | 1 |
Occupation: Self-employed | 150 | Dummy, 1 = self-employed, 0 otherwise | 0.58 | 0.33 | 0 | 1 |
Access to extension services: Yes | 150 | Number of visits | 0.68 | 1.86 | 0 | 6 |
Membership of farm organisation: Yes | 150 | Dummy, 1 = member of farm organisation, 0 otherwise | 0.70 | 0.48 | 0 | 1 |
Access to credit: No | 150 | Dummy, 1 = access to credit, 0 otherwise | 0.62 | 0.44 | 0 | 1 |
Marital status: Married | 150 | Dummy, 1 = married, 0 otherwise | 0.58 | 0.34 | 0 | 1 |
Age of the farmer | 150 | Years | 48.23 | 8.40 | 24 | 68 |
Family size | 150 | Person | 5.32 | 2.15 | 2 | 13 |
Farm size | 150 | Hectares | 2.47 | 0.54 | 0.53 | 5.20 |
Years spent in school | 150 | Years | 11.43 | 4.29 | 4 | 15 |
Household income | 150 | ZAR | 4389.12 | 43.86 | 520.13 | 8365.45 |
Potato experience | 150 | Years | 8.40 | 4.78 | 1 | 30 |
Irrigation membership | 150 | Dummy, 1 = irrigation member, 0 otherwise | 0.68 | 1.23 | 0 | 1 |
Variable | Mean | Standard Deviation | Minimum | Maximum |
---|---|---|---|---|
Output | ||||
Potato quantity (Bags of 10 kg) | 536.38 | 26.39 | 0.41 | 120 |
Input | ||||
Farm size (ha) | 2.34 | 3.65 | 0.5 | 5.13 |
Fertilisers (kg) | 140.75 | 3200 | 0 | 220.68 |
Seed quantity (kg) | 450.89 | 476.41 | 20 | 1600 |
Potato labour used (Man-days) | 11.23 | 7.34 | 1.53 | 30 |
Pesticides (kg) | 130.46 | 144.32 | 0 | 780 |
Hired tractor (ZAR) | 670.25 | 840.29 | 300 | 1200 |
Cost and Revenue | Amount in Rands (ZAR) | Percentage (%) | |
---|---|---|---|
Gross Revenue | |||
Potato gross income at average prices | 19,850.41 | ||
Variable Costs | |||
Costs of seedling | 2578.68 | 23.30 | |
Family labour | 1860 | 22.55 | |
Hired labour | 90.41 | 1.12 | |
Total labour | 1950.51 | 9.03 | |
Fertiliser (NPK) (inorganic) | 1740.68 | 22.43 | |
Hire a tractor to prepare the land | 2269.17 | 23.28 | |
Pesticides (chemicals) | 795.12 | 18.29 | |
Total variable cost | 9334.16 | 100 | |
Gross Margin of Potato | 10,516.25 | ||
Returns to variable costs | 1.13 | ||
Less fixed cost (land rent, depreciation of farm assets and farm tools) | |||
Total fixed costs (ZAR) | 3489.14 | ||
Net farm returns | 7027.11 |
Variable | Frequency of Farms | Percentage (%) |
---|---|---|
Technical efficiency | ||
0.01–0.15 | 0 | 0 |
0.016–0.25 | 3 | 2.27 |
0.26–0.50 | 18 | 22.05 |
0.51–0.75 | 25 | 24.11 |
0.76–0.99 | 33 | 46.57 |
0.89–100 | 7 | 5.0 |
Total | 86 | 100 |
Minimum | 0.22 | |
Maximum | 0.99 | |
Mean TE | 0.891 |
Profit Function | Parameter | Coefficient | S. Error | p > z |
---|---|---|---|---|
Constant | 6.738 | 1.260 | 0.009 *** | |
lnFarm Size | 0.278 | 0.122 | 0.000 *** | |
lnSeed cost | 0.184 | 0.126 | 0.000 *** | |
lnFertilizer cost | 0.152 | 0.098 | 0.002 *** | |
lnLabour | −0.034 | −2.257 | 0.041 ** | |
lnPesticides cost | 0.013 | 0.105 | 0.067 ** | |
lnHired tractor cost | −0.029 | −0.025 | 0.004 *** | |
Inefficiency regression | ||||
Age of the potato farmer | −1.832 | −0.321 | 0.018 ** | |
Potato farm size | 0.618 | 0.244 | 0.48 ** | |
Access to credit | −0.546 | −0.398 | 0.41 ** | |
Years spent in school | 1.362 | 0.265 | 0.000 *** | |
Access to extension services | 0.920 | 0.127 | 0.006 *** | |
Family size | 0.468 | 0.097 | 0.014 ** | |
Cold storage | −0.353 | −0.242 | 0.032 ** | |
Non-farm Income | 0.269 | 0.135 | 0.012** | |
Variance parameters | LR test = 68.359 *** Return to scale = 0.56 | |||
Wald chi2(13) = 258.36 | 1.56 | 0.000 *** | ||
0.70 | 0.162 | |||
1.09 | 0.125 | |||
Log-likelihood | −324.8550 | Prob > chi2 = 0.0000 |
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Mdoda, L.; Obi, A.; Tamako, N.; Naidoo, D.; Baloyi, R. Resource Use Efficiency of Potato Production among Smallholder Irrigated Farmers in the Eastern Cape Province of South Africa. Sustainability 2023, 15, 14457. https://doi.org/10.3390/su151914457
Mdoda L, Obi A, Tamako N, Naidoo D, Baloyi R. Resource Use Efficiency of Potato Production among Smallholder Irrigated Farmers in the Eastern Cape Province of South Africa. Sustainability. 2023; 15(19):14457. https://doi.org/10.3390/su151914457
Chicago/Turabian StyleMdoda, Lelethu, Ajuruchukwu Obi, Nthabeleng Tamako, Denver Naidoo, and Raesetse Baloyi. 2023. "Resource Use Efficiency of Potato Production among Smallholder Irrigated Farmers in the Eastern Cape Province of South Africa" Sustainability 15, no. 19: 14457. https://doi.org/10.3390/su151914457