The TECHNICAL EFFICIENCY OF DAIRY FARMS IN SUDAN: A STOCHASTIC FRONTIER APROCH

Abstract

This study examined the technical efficiency of dairy farms in East Nile locality, Khartoum State-Sudan in the year 2017. Information related to various aspects of dairy farming was collected from 85 farmers selected randomly using a structured questionnaire. Descriptive Statistics, Cobb-Douglas stochastic production frontier and technical efficiency models were used to determine the effect of each input as the production frontier and the principal factors that explain differences on farm efficiency. The results of the analysis revealed that the technical efficiency ranged between 23-100 percent for small farms and 42-96 percent for large farms, with a mean of 60percent of small farms and 76 percent for large farms. The results suggested that the same amount of milk produced by the farms in the sample could have been achieved with approximately 40and 24 percent with fewer resources if all farms would have operated at 100 percent technical efficiency respectively for small and large farms. The estimated gamma parameters (γ) for small and large farms 0.99 and0.98, showing that the farm specific variability contributed more to the variation in yield among the dairy farmers, indicating that 99% and 98% per cent of the differences between observed and the maximum production frontier output of milk among the farmers was due to difference in farmer's level of technical efficiency by adopting different management practices in small and large farms, respectively. These factors were under the control of the farmers and the influence of which could be reduced to enhance technical efficiency of the dairy farmers in East Nile locality, Khartoum State. The return to scale for the small and large farms revealed that the farmers operated in the increase return to scale of the production surface having RTS of 1.052and 2.11, respectively.