Factors affecting technical efficiency of small-scale raisin producers in Eksteenskuil

[摘要] English: Growing per capita income and changing consumption patterns have led commercial retailers to restructure their marketing techniques with the aim of obtaining a greater market share of the consumer's pocket. Retailers have focussed more on bulk procurement and consistent supply of quality produce from a few large food producers. Consequently, small-scale farmers are either excluded from the commercial markets or the few that participate in commercial markets are struggling to meet the stringent requirements from retailers. However, some scholars advise that support is needed for small-scale farmers to participate in commercial markets. FairTrade (FT) is one of the organisations that have provided an opportunity to small-scale farmers in developing countries to participate in commercial markets. Eksteenskuil raisin producers are among the farmers that have been given the opportunity to participate in commercial markets. Despite the support, Eksteenskuil raisin producers are unable to meet market requirements such as stipulated raisin volumes of adequate quality. Hence, this study estimated the level of technical efficiencies and assessed factors affecting efficiencies of Eksteenskuil raisin producers. The farming operation of Eksteenskuil raisin farmers is divided into two production levels, production and quality. Consequently, a Two-stage Data Envelopment Analysis (DEA) Model was used to understand the level of technical efficiencies in each production level. Due to a small sample size and a large number of independent variables used, degrees of freedom were identified as a problem. A Tobit Principal Component Regression (PCR) was used to reduce the dimensionality of the variables without losing important variables that explain inefficiencies. Primary data was used to obtain technical efficiency estimates and factors hypothesised to influence efficiency. Primary data was obtained through a structured questionnaire and personal interviews. A sample of 28 raisin producers in Eksteenskuil was used. A similar sample of 28 large-scale farmers was also conducted to be used for benchmarking with small-scale farmers. The empirical results revealed that production efficiencies of small-scale farmers are relatively high although farmers are struggling to increase raisin volumes. When small-scale farmers are benchmarked against each other the mean production efficiency of 81% was estimated. This means that on average small-scale farmers have the potential to operate on the efficient frontier if the mean production efficiency increases by 19 percentage points. On the other hand, the results of a benchmark of both small-scale and large-scale farmers revealed a mean production efficient of 69% and 85% respectively. This implies that small-scale farmers are less efficient relative to large-scale farmers in producing maximum possible raisin volumes with available inputs. Variables that were identified to increase the level of production efficiency are: farmer's age, formal education, farming experience, land tenure, formal credit, record keeping, timely pruning, entrepreneur index, and Middle Island (soil fertility). Thus farmers who are located on the efficient frontier display a number of the variables mentioned above in their characteristics. On the other hand family labour, social capital and area harvested were also hypothesised to either increase or decrease the level of production efficiency. Hence, a positive or negative sign was expected. Results on the second stage of the two-stage DEA model revealed a mean quality efficiency of 97% for small-scale farmers when benchmarked against each other. The results indicate that small-scale farmers have the potential to increase their mean efficiency by three percentage points to operate on the quality efficient frontier when benchmarked against each other. A benchmark of both small-scale and large-scale raisin producers revealed a mean quality efficiency of 79% and 88% respectively. The scope of variations between the quality efficiency scores of small-scale farmers was recognised to be limited. Due to limited variations, none of the hypothesised variables were found to be significant. Policy implication highlighted from this study is that education and training should be prioritised by policy makers in the study area. Existing support from various stakeholders involved with small-scale farmers in Eksteenskuil should be intensified in order to prevent poverty from becoming an epidemic in the community

[发布机构] University of the Free State