Smallholders' Cost Efficiency in Mozambique: Implications for Improved Maize Seed Adoption

Maize is an important staple in Mozambique. It is also a dominant crop produced by smallholder farmers. However, the actual maize yields, currently estimated at 1.4 tons/ha, fall short of potential yields of 5-6.5 tons/ha. With population growth rate increasingly exceeding agricultural (and maize) productivity growth rate, the government of Mozambique faces a serious problem of food insecurity and poverty alleviation. This study examines cost inefficiency among smallholder maize farmers in Mozambique, and the impact of improved maize seed adoption on cost efficiency. A Translog functional form is used to estimate the frontier cost function. A cost-inefficiency function is used to examine the factors that determine cost inefficiency among farmers. Econometric techniques to control for self-selection bias resulting from endogeneity of the adoption variable are used.