A comparative analysis of technical efficiency of smallholder tobacco and maize farmers in Tabora, Tanzania

The study presented here considers the relative efficiency of planting tobacco and maize in the tobacco-producing Tabora region of Tanzania. The study used a 2013 survey that was conducted among smallholder farmers in the Tabora region. The aim was to investigate whether farmers are better off planting tobacco or maize. The paper briefly reviews the importance of agriculture in general and tobacco planting in particular on the Tanzanian economy. The paper then reviews the methodology used in the analysis, The Frontier Production Function. The findings show relative inefficiency in both tobacco and maize production. When the two are compared, one finds a statistically significant higher efficiency in the production of maize compared to tobacco. In other words, maize farmers can produce the same output utilizing 76.83% of the current input, while the corresponding value for tobacco is 73.89 percent.  After generating the efficiency index of each farmer and for each crop, a multiple linear regression was estimated to identify significant determinants of efficiency. For the production of maize, five significant explanatory variables were identified (gender, age, education, household size, and farm size). For tobacco production, five explanatory variables including the variable “feeling sick while curing tobacco” were significant. In other words, the efficiency equation for maize has significantly better fit. In general, the efficiency indicators suggest that Tanzanian small scale farmers are more productive planting maize than tobacco.