Abstract:
This paper investigates the technical efficiency of smallholder dairy farmers in
Tanga City using the Stochastic Production Frontier Function (SPFF) approach.
The study estimates the levels of Technical Efficiency (TE) of smallholder dairy
farmers. This was a cross sectional research design which used simple random
sampling technique to select the subjects into the study. A total of 80 smallholder
dairy farmers were interviewed using semi–structured questionnaire. Data analysis
techniques included collating field data and decomposing it into descriptive
statistics and estimating the stochastic production frontier model for dairy keepers
in Tanga City. The overall Technical Efficiency (TE) of smallholder dairy farmers in
Tanga City was 89.7%. The study found that labour, feeds, veterinary services and
capital stock increase the ability of producing more milk which in turn boosts milk
productivity and thereby raises milk supply. However, labour cost was found to
have a negative effect on the TE while feeds veterinary services and capital stock had
positive effect. Therefore, this study recommends reduction of labour costs through
the use of improved simple mechanical technologies that reduce drudgery in pasture
cutting and hence increase labour productivity.
