DOI: 10.36347/sjavs.2017.v04i02.005

Pages: 68-78

This study assessed the technical efficiency of smallholder tobacco farmers in Makoni district of Zimbabwe and the impact of the impact of contract farming on technical efficiency using a sample of 98 randomly selected farmers comprising 78% contract farmers and 22% non-contract farmers. The study employed the stochastic frontier analysis to estimate the production function and technical efficiencies. The results show that contract farmers have a higher mean technical efficiency of 94% whilst non-contract farmers have a mean technical efficiency of 67%. The overall mean technical efficiency of the smallholder tobacco farmers in Makoni district is 73%. These results show that contract tobacco farmers are more efficient than non-contract tobacco farmers. The results also reveal that fertiliser and fixed costs are important inputs in smallholder tobacco production. More importantly, the study also found that contract farming significantly improves the technical efficiency of farmers. Non-contract farmers are 10.84 more inefficient than contract farmers and this result is significant at 5% level. Other determinants that significantly improve technical efficiency are education level of farmer, the total cropping area, gender of farmer whilst access to other loans apart from the contract farming credit reduces technical efficiency. Based on the findings the study recommends that government must promote increased access of contract farming arrangements particularly for women farmers as only 4.5% of the contract farmers are women as a measure to increasing overall productivity of tobacco farmers.