ESTIMATION OF MILK PRODUCTION EFFICIENCY OF DAIRY COW FARMS IN EMBU AND MERU COUNTIES OF KENYA

Abstract

This study aimed at determining the technical and cost efficiencies of dairy cow farms in Embu and Meru counties of Kenya, as indicators of milk access potential. Data were collected from 135 randomly sampled farms in 2010. The sample size was determined using the Cochran’s (1977) formula. Data were collected using semi-structured questionnaires, after which they were entered into the excel spreadsheets and edited.Stochastic frontier production and cost functions were estimated using the maximum likelihood estimation (MLE) technique. Results revealed that the number of lactating cows and the amounts of roughages, concentrates, and mineral supplements were the major factors influencing milk output, while the prices of roughages and labour caused most variation in the production cost. The mean farmers’ technical and cost efficiency indices were 0.837 and 1.044, respectively. The function coefficient of the production model was 2.11. These results implied that milk production could be increased by 16.3% through better use of available resources given the current state of technology without extra cost, while the cost of milk production could be decreased by about 4.4% without decreasing output. It was concluded that optimization of farm efficiencies while taking advantage of economies of scale through increased production inputs could be part of short-term measures to address the challenges facing smallholder dairy farming. The researchers require identifying inefficiency determinants and ensuring stakeholder involvement in the process to enhance adoption of the outputs. The policy makers should discourage sub-division of agricultural land while concurrently promoting enterprise specialization, support approaches to make feed concentrates, mineral supplements and chaff-cutters affordable, and emphasize on the reduction in cost of production.