Determination of Cost Efficiency Level of Production among Sugarcane Farmers in Nyanza Region, Kenya

Abstract

In agricultural production, labour, capital and land are critical ingredients in increasing output levels. In sugarcane and food crops production, farmers always experience competing requirements on production inputs. In Kenya, farmers are uprooting sugarcane to compensate for food deficits without due regard to the possibility that these two crops can coexist in case production inputs are in short supply. Based on production theory, this study established the cost efficiency level and the possible likelihoods sugarcane farmers, in Nyanza region, can make given the production inputs. Cross sectional data and Stratified random sampling was used. Stochastic Frontier and Multinomial Logit regressions obtained the results which showed that sugarcane farmers were cost inefficient; the significant determinant of choices that farmers make were the cost of labour and the cost of land. However, they were positive and negative respectively. This paper recommended for the betterment of wages and cost of land controls if efficiency and sugarcane output is to be increased.