Assessment of Profit Efficiency of Smallholder Maize Farmers in Limpopo Province, South Africa: A Stochastic Frontier Approach

The primary goal of this study is to evaluate the profit efficiency and identify the factors influencing profit inefficiency among small-holder maize farmers in the Limpopo province of South Africa. The research employed a stochastic profit frontier approach and collected primary data by administering a semi-structured questionnaire to 307 smallholder farmers, who were selected using a stratified random sampling method across all five districts in the study area. The results revealed that profit efficiency ranged from 0 to 0.90, with an average of 0.612. This suggests that by improving technical and allocative efficiencies, the typical maize farmer could potentially increase their profits by 38.8%. This presents opportunities for farmers to elevate their agricultural earnings, leading to a reduction in poverty. This progress could significantly impact many farmers, particularly since maize farming is their primary source of income. As a result, increasing investment in extension education through producer organisations is recommended in order to enhance agricultural productivity and improve agricultural marketing by effectively utilising marketing information.