Profit efficiency analysis among groundnut farmers from Malawi

Bocher, T.F. and Simtowe, F. (2017) Profit efficiency analysis among groundnut farmers from Malawi. Journal of Development and Agricultural Economics, 9 (10). pp. 278-288.

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This study analyzes the profit efficiency and its determinants in groundnut production, applying a stochastic profit frontier model on survey data collected from 400 groundnut growing households in Malawi. The result indicated that the inefficiencies in groundnut production hindered profitability in the sector. The profit efficiency ranged from 1% to 89% (with a mean of 45%). Significant association was observed between efficiency and both farm specific and institutional factors. Efficiency appeared to be significantly and positively associated with access to extension service (p<0.05), household size (p<0.05) and, soil quality (p<0.000). Distance to the local market from the homestead (p<0.000), and land size (p<0.000) allocated to groundnut production were found to reduce the profit efficiency. Maleheaded households, on the average were six percent more efficient compared to female headed households. The study indicated potential for increasing groundnut profitability by 55% by improving the access to extension services and markets, which underscores the need for increased resource allocation to support the delivery of extension services and to the improvement of market infrastructure for the enhancement of groundnut profitability.

Item Type: Article
Uncontrolled Keywords: Groundnut production, profit efficiency, agricultural productivity, extension, Malawi
Author Affiliation: International Potato Center, ILRI Campus, 25171-00603, Nairobi, Kenya
Subjects: Plant Production
Divisions: Groundnut
Depositing User: Mr T L Gautham
Date Deposited: 13 Dec 2017 11:05
Last Modified: 13 Dec 2017 11:05

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