ANALYSIS OF PRODUCTION, SOCIO-ECONOMIC AND INSTITUTIONAL FACTORS AFFECTING TECHNICAL EFFICIENCY OF SMALLHOLDER BANANA PRODUCERS IN KIRINYAGA CENTRAL SUB-COUNTY, KENYA

Abstract

Banana provides food, nutrition security and income for most households and is fourth most popular food crop in the world after wheat, maize and rice. Despite its significance, full potential of banana production in Kenya remains unexploited by smallholder producers. This is as a result of low technical efficiency especially in utilization of farming inputs and producer specific factors like production, socio-economic and institutional factors among others. In Kirinyaga County, the actual banana production is at 4-18 tonnes per acre against the potential of 30-40 tonnes. Due to the limited supply of resources for production, attainment of highest possible levels of technical efficiency is key to achieving sufficiency in banana farming. This study aimed at analyzing the effects of production, socio-economic and institutional factors on technical efficiency of smallholder banana producers in Kirinyaga Central Sub-County, Kenya. The study used a cross-sectional research design and targeted a population of 24,440 smallholder banana producers. Multistage sampling technique was employed where purposive sampling and simple random sampling methods were used in some stages to sample respondents in the study area. A sample of 402 smallholder banana producers were selected. Using a questionnaire, primary data on production, socio-economic and institutional factors affecting technical efficiency of banana production was collected. The data was then analyzed using Stata version 17 and SPSS version 25. Descriptive statistics were used to describe the production, socio-economic and institutional factors of the smallholder banana producers. A stochastic frontier analysis approach was used to model the technical efficiency level using the Cobb-Douglas function. The stochastic production function of the Cobb Douglas function was estimated using the maximum likelihood estimation technique. The study showed that the level of banana production technical efficiency among the smallholder producers varied between 0.9% to 95.5% and average technical efficiency of 83.1%. According to the model parameters calculated, land set aside for production of banana, banana suckers and agrochemicals were significant production factors in banana cultivation at 5% significance level. The study found that agrochemicals and planting materials had positive effects on technical efficiency whereas land size had a negative impact on technical efficiency. This implied that increasing the amount of land set aside for banana production by an acre reduces the amount of banana harvested by 0.438 kgs while increasing the amount of planting materials and agrochemicals used by one unit increases banana production by 1.315 and 0.155 kgs, respectively. The study found that decision makers’ age and size of the household had negative effects on banana production technical efficiency whereas education, experience, producer group membership and market access had positive effects. The study recommends people with high levels of education to venture into banana production. In addition, producer group formation and membership be encouraged for the benefit of increasing technical efficiencies. The inefficient producers are advised to increase their present output by enhancing technical efficiency as a result of the inefficient utilization of their resources throughout production.