Analyses of Production Variability and Factors Affecting Technical Efficiency of Tobacco Farmers in Tanzania

In this paper, the factors affecting technical efficiency of tobacco farmers in Tanzania are examined. Tanzania is the third biggest producer of tobacco in Africa, after Zimbabwe and Malawi. About 0.08 percent of Tanzania’s land (about 34,000 hectares) is allocated for growing tobacco. More so, Tanzania has great potential in tobacco production and it is one of the countries that is expected to dominate the African continent in terms of foreign exchange earnings. Using a stochastic frontier model (SFM) proposed by Battese and Coelli (1995), the paper estimates the levels of technical efficiency of 200 tobacco farmers using the maximum-likelihood method. The data used for the study were obtained from the Tobacco Control Policy Survey conducted in Tanzania in 2013. The survey was conducted in Sikonge, Uyui and Urambo districts in Tabora region. The districts were chosen to represent potential tobacco growing areas in the country. Results show that smallholder tobacco farmers in Tabora are significantly less efficient. Technical efficiencies of tobacco farmers range from 0.001 to 0.981 with a mean of 0.7162. In addition, farmers’ characteristics such as age, primary level of education, keeping large family sizes, air breath during tobacco curling, extension agent’s advice and distance to farm land are the major socioeconomic variables influencing farmers’ efficiency.