Evaluation of Technical Efficiency of Dairy Farms in Eastern Central Highlands, Kenya

Despite Kenya’s long dairy farming history spanning about 100 years, favourable climatic conditions and a 3.5 million national herd, milk per capita consumption is low (76.7 kg)  and export quantities (milk) to the regional market where its products enjoy preferential access are negligible. These observations raised the question of farm level technical efficiency of milk production. This study evaluated the technical efficiency of dairy cow farms in Embu and Meru counties of Kenya, using the stochastic frontier approach. Data were randomly collected from 135 dairy farms. The sample size was determined using the Cochran’s (1977) formula. Data were analyzed using the SPSS, Frontier 4.1 c and STATA computer softwares, where both descriptive and inferential statistics were derived. Stochastic frontier production function was estimated using the maximum likelihood estimation technique. The farms were characterized and technical efficiency estimated. Results revealed that the number of lactating cows and the amounts of roughages, concentrates, and mineral supplements were the major factors influencing milk output. The dairy animals received inadequate feeds and mineral supplements. The animals were overstocked and underfed in an average two-acre mixed crop-livestock farm. The mean farm technical efficiency was 83.7%, implying that milk production could be increased by 16.3% through better use of available resources, given the current state of technology without extra cost. The milk production model coefficient was 2.11. It was recommended that farmers specialize in either dairy or crop farming. Those choosing dairying, require shifting from the Friesians and Ayrshires to the smaller dairy breeds such as Jerseys. The policy makers should provide legal guidelines to ensure that sub-division of agricultural land is minimized and further, promote both enterprise specialization and approaches that make the farm inputs such as concentrates and mineral supplements affordable.