Abstract :
This study presents the analysis economic efficiency of maize production In Huye District, Rwanda by using stochastic frontier cost function. The primary data were collected from 65 maize farmers in the study area during February–March 2013 for the cropping year 2012–2013. Result of the total revenue (TR), Gross margin, net farm income (NFI) and return on Rwandan francs invested (ROI) per hectare were 2,611,000 Rwf, 492,830 Rwf, 475,830Rwf and 0.22 Rwf respectively. The results shows that maize farming in the study area is not profitable and Diseconomics of Scale was obtained as 0.99 (ES < 1), hence diseconomics of scale exists. Results of the stochastic frontier cost function showed that Parameter of estimate indicated positive relationship and significance at 10% level for fertilizer and labour except maize output have negative relationship but significant at 10%. While improved seed have positive relationship but insignificant at 10%. Further, quantitative estimates obtained from the cost function shows Mean cost efficiency index was 1.026, slightly above frontier cost indicating that an average maize farms from the study incurred about 2.6% costs above the frontier cost-an indication of inefficiency. Some constraint to maize farmers in the study area is inadequate credit, inadequate contact with extension agents and lack of improved seeds. The study recommended that the work of extension agents should be intensified in the study area.
