Economic efficiency of smallholder rice producers in Maramvya Irrigated Scheme, Burundi

A DISSERTATION SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN AGRICULTURAL AND APPLIED ECONOMICS OF SOKOINE UNIVERSITY OF AGRICULTURE. MOROGORO, TANZANIA.

This study assessed the extent to which rice producers from Maramvya irrigated scheme could raise their productivity and profitability if they efficiently use inputs in producing rice. To achieve this objective, simple random sampling was used to select 230 rice farmers in the study area and cross-sectional data were collected for season 2016/A. The collected data were subjected to analysis where output responsiveness with respect to each of the inputs, technical, allocative and economic efficiencies were estimated. Stochastic frontier analysis was used to estimate technical, allocative and economic efficiencies. The study applied Cobb-Douglas functional form for the stochastic frontier production and cost functions and used one-step maximum likelihood estimation to estimate parameters for stochastic frontier models. The study further assessed factors affecting efficiency levels among rice producers. Findings of this study reveal that output elasticities with respect to land, labour, seed and fertilizer were 0.41, 0.45, -0.11 and 0.24 respectively, meaning that labour variable was more responsible in rice production increase while seed variable was in negative relationship with production levels. The mean technical, allocative and economic efficiencies were 82%, 71% and 58% respectively, meaning that the sampled farmers were relatively technically efficient than they were allocatively and economically, with 42% room to expand productivity and profitability. Furthermore, the results show that the major factor affecting efficiency levels positively in the study area was the level of education while age of the farmer, household size, access to credit and shortage of water significantly impact efficiency levels negatively. The study recommended introduction of new techniques rather than relying on expansion of land and labour intensification. Focus should be on input market and availability, but also in the long run, focus should be oriented on education and maintenance of canal for irrigation.