Assessment Of Profit Efficiency Among Sweet Yellow Passion Fruit Farmers In Mbeere South, Embu County

ABSTRACT

The horticulture industry in Kenya has been very successful in the last one and a half decades. This subsector has grown to become a major employer and foreign exchange earner. In 2014, fruits contributed Kshs. 51.5 billions accounting for 22% of the domestic value of horticultural produce. The sweet yellow passion fruit variety is gaining adoption in Mbeere South Sub-county due to its apparent adaptation to the hot arid conditions and a ready market. Efforts had been made to promote the production and marketing to boost smallholder farmer income by various passion fruits stakeholders. Despite the efforts, profit levels were considered to be dismal as some farmers were investing highly to the fruit agribusiness venture but ending up making losses due to high production costs. The causes of the varying profits had not been empirically established. The economic/profit efficiency level of the agro-enterprise was therefore unknown and further the use of agricultural credit on the sweet yellow passion fruit by smallholder farmers in Mbeere South was not known. Therefore, the objective of this study was to analyze profit efficiency levels among smallholder sweet yellow passion fruit farmers, to determine the influence of socio-economic and institutional factors to profit efficiency among sweet yellow passion fruit farmers, and to measure the use of credit among sweet yellow passion fruit farmers in Mbeere South sub-county. This study used primary data which was obtained from smallholder farmers through a semi-structured questionnaire that was administered to farmers through an interview schedule. In this study, the target population was defined by the smallholder farmers producing sweet yellow passion fruit and the sample size was 90. A purposive sampling method was employed to select Mbeere South as the area of study and a systematic random sampling method was used to select two locations from each division in the district. Systematic random sampling at an interval of 1 respondent was used to select a sample from each division for the study; that is every second sweet yellow passion fruit farmer was selected. The obtained data was analyzed using Stochastic Frontier Analysis (SFA) method and descriptive statistics by running a model on frontier 4.1 version and STATA 11 Softwares respectively. The study showed that the profit efficiency levels ranged from 23% to 90% with a mean of 76% implying that an estimated 24% profit loss was being made due to a combination of both technical and allocative inefficiencies. The study also found out that the frequency of farming experience, group membership and access to market information influence profit efficiency significantly. Therefore it is recommended that extension education investments should be scaled up through producer organizations to improve agricultural productivity and agricultural marketing through proper search and use of marketing information.