Technical Efficiency of Farming Households in Uganda: Evidence from the national Panel Survey Data, 2005-2010

Abstract

We investigate performance of the agricultural sector in Uganda and whether it has varied by the 4 major regions in Uganda using agricultural technical efficiency as a proxy for performance on a nationally representative panel data set. We apply the classical parametric stochastic production frontier estimator in estimating the technical efficiency scores for each of the 4 regions using a panel framework. We find rather surprising results contrary to our hypothetical expectations. The households in the northern and eastern regions are found to have relatively higher levels of technical efficiency over the study period compared to the rest of the regions. The presence of increased government intervention in the peace process, and concerted effort by both government and international agencies to develop and promote agriculture programs in the region during this period, were possibly responsible for the observed levels and trends in technical efficiency in the two regions. The western region had the lowest levels of technical efficiency and a declining trend over the study period. Overall in the country data, male household heads are found to be more efficient than their female counterparts and the difference is found to be significant at 5%. Higher levels of education are found to significantly decrease inefficiency at the 10% level.