Efficiency of resource utilization in small-scale farming: a case study of maize and cotton production in Machakos and Meru Districts,Kenya.

Abstract

The present study is concerned with the analysis of resource utilization in maize and cotton production on small-scale farms in Mbiuni Location (Machakos) and Lower Abothuguchi Location (Meru). The two locations are under the Integrated Agricultural Development Programme (IADP). The principal objectives of the study were: J (a) to determine the productivity of the resources used in maize and cotton production, and (b) to determine the efficiency of resource. utilization within and between maize and cotton enterprises. The methodology utilized consists cf fitting Cobb-Douglas 3ingle equation production functions to a cr.ess-section sample of 30 farmers in Lower Abothuguchi, and 32 farmers in Mbiuni. The data used in this study were ccllected during the IADP Farm Survey for the 1977 long rains season. This survey is a,continuous one and consists of monthly visits to each farmer, as well as the collection of data at the beginning and end of each production season. The efficiency of resource utilization within the maize or cotton enterprises is determined by comparing the marginal value productivities of the resources wlth their marginal factor costs. Efficient allocation of resources between the maize and cotton enterprises is determined by comparing the

marginal value productivities of the resources that are common to the two enterprises. Empirical analysis indicates that (a) except for the few.significant inefficiencies, Mbiuni and Lower Abothuguchi farmers utilized their resources efficiently~ The marginal value productivities of the resources did not differ significantly from the marginal factor costs. This finding confirms Schultz's 'poor but e£ficient' hypothesis. (b) Mbiuni and Lower Abothuguchi farmers were relatively efficient in the allocation of resources between maize and cotton enterprises. The marginal value productivities of resources common to the two enterprises did not differ significantly. This result is in agreement with Wolgin's finding. Since the analysis implies that there is little scope for increasing maize and cotton output through a re-allocation of existing resources, the solution would be to improve the rate of adoption of the technology that already exists in Mbiuni and Lower Abothuguchi. The IADP has introduced technology in these areas in form of new varieties of seed, fertilizers, pesticides, and tractors. However, not many farmers have adopted this technology. It is also suggested that maize and cotton output could be increased by introducing economic incentives to the farmers. These would include: (a) Raising the prices of maize and cotton.

(b) Introducing a subsidy on purchased farm inputs. (c) Introducing the Guaranteed Minimum Returns Scheme to small-scale farmers. This scheme has been discontinued for larger-scale farmers due to repayment problems. However, it is advocated for small-scale farmers because they face higher risks than large-scale farmers. It is hoped that policy makers will take note of these suggestions in their efforts to increase maize and cotton output.