Market production and productivity: The effects of cash cropping on technical efficiency in staple crop production

To meet increasing food demand, most developing countries cannot rely on expanding the crop area, but will need to stimulate yield growth arising from increased factor productivity. This can be achieved through more efficient utilization of inputs to produce maximum output given existing technologies. Low productivity arising from technical inefficiency negatively impacts on household income and food security by reducing food availability as well as economic access. It has been hypothesized that market-oriented production enhances productivity of staple crops through increased use of quality inputs and management technologies. This hypothesis was tested using household survey data from western Uganda. Using a stochastic production frontier model, technical efficiency of the major cash crop and staple crops was estimated. A propensity score matching approach was used to compare the technical efficiency of market-oriented and subsistence households in production of selected staple crops. Results show higher technical inefficiency in staple crops compared to the cash crop among the market-oriented households. A significant negative relationship was also found between cash crop production and technical efficiency in staple crops production. The negative association was attributed to withdrawal of critical resources particularly labor from staple crops to cash crops during peak periods of labor demand. Key words: Crop productivity, food security, market production, stochastic production frontier.