Technical efficiency of beef production in agricultural districts of Botswana: A Latent Class Stochastic Frontier Model Approach

Abstract

The study examined the production technologies and productive performance of smallholder beef production systems to determine the levels of technical inefficiency in the agricultural districts of Botswana. The analysis draws on data from 26 districts of Botswana for the period of 2006-2014 to estimate latent class stochastic frontiers in which the technological class to which the agricultural district belongs is determined within the model. To enable efficiency comparisons between agricultural districts across these technological classes, a meta-frontier that encompasses all the class frontiers is estimated. Components of efficiency drivers are embedded in this estimation to explain agricultural districts’ technical inefficiency with respect to their respective class frontiers. Results show that beef production efficiency is positively associated with the rate of formal education and negatively related with an increase in proportion of exotic breeds, high mortality and low offtake rates, indicating the presence of considerable scope for animal husbandry improvement. The mean technical efficiency scores for beef production between 2006 and 2014 for agricultural districts in class one is 18 % whereas it is 13 % for agricultural districts in class two, implying high potential to improve beef production using the same level of agricultural inputs through efficiency-enhancing investments.