Intra-household labour allocation and technical efficiency among groundnut producers in eastern Uganda

Improved production technologies have been developed and adopted by some farmers in the country. These technologies were developed with the aim of improving farmer’s welfare but its known that households get income from sources other than farm production. They therefore have to decide on whether to participate in off-farm income generating activities or not and how much of their labour should be allocated to such activities or not and how much of their labour should be allocated to such activities so as to maximize household utility. But the decision to participate in off-farm production could impact on the achieved level of technical efficiency. A survey was carried out in Mayuge, Kumi and Pallisa districts in Eastern Uganda. It was done in areas where the Integrated Pest Management Collaborative Research Support Program (IPM CRSP) project set up IPM demonstration plots. The study determined the factors that influence the likelihood of a farm household participating in off-farm work and factors that determine the amount of off-farm labour supply. It also examined the effect of household labour re-allocation to off-farm activities on groundnut production efficiency. Data were collected from a sample of 210 farmers on socio-demographics and groundnut production using a pre-tested questionnaire. Descriptive statistics on the socio-economic characteristics of the households were generated. A maximum likelihood bi-variate probit function explaining the factors influencing the likelihood of the farm household participating in non-farm work was estimated. Also a household off-farm labour supply function was estimated to establish the factors that determine off-farm supply levels. After estimating a stochastic production frontier, the efficiency level of each farmer was established. Using a t-test statistic, mean efficiencies of various categories of farmers were tested for statistical differences. Results showed that age, education and off-farm incomes significantly (P<0.1) affect the off-farm labour participation decisions of both household head and spouse and that output price, off-farm wages, technology used, off-farm farm income ratio, education level of household head and spouse, total household time endowment and market labour wages significantly (P<0.1) determine the level of household labour supply to off-farm work. Farmers using IPM technology and traditional methods were found to be 62.4% and 45.8% efficient respectively and the difference was significant at 1% level. Results also showed that off-farm labour re-allocation only affected efficiency levels of farmer’s using traditional methods of production at 1% level. Agricultural production can therefore be increased if the youth and more educated persons are particularly encouraged to participate in farming, farm output prices increased, better production technologies developed and more profitable (commercial) production encouraged. Also farmers should adopt IPM/improved technology no matter whether they have off-farm employment or not.