Profitability and technical efficiency of rice farms using traditional and improved milling machines: Evidence from Mali

Abstract

The introduction of improved rice milling machines in rice producing areas in Mali is expected to minimize losses during processing. This study compares the profitability and technical efficiency of rice farms using traditional and improved rice milling machines in the Segou region of Mali. It used cross sectional data collected from 396 rice farms from N’Debougou, M’Bewani and Niono agro-ecological zones of Segou region of Mali. Descriptive statistics, benefit cost ratio, stochastic frontier production function and Kendall’s coefficient of concordance were the methods of analysis employed. We find that whereas access to improved rice milling machines (IRMMs) was high for farms employing the technology, it was low for users of traditional rice milling machines. The transaction cost of a bag of milled rice, the profit for a one-hectare rice farm and the returns on a CFA invested by farms using improved rice milling machine were 818 CFA, 7014 CFA and 0.78 compared with 711 CFA, 5113 CFA and 0.56 estimated for users of traditional rice milling machines, respectively. The mean technical efficiencies (TE) for farms using improved rice milling machines and the traditional rice milling machines were 86% and 81%, respectively. Generally, whereas milled rice output was influenced by labour, capital and farm size, technical efficiency was influenced by educational level and monthly income of managers of rice farms. The main constraint that farms faced using the improved rice milling machines was low returns to bran followed by high transportation cost. Given that farms using IRMMs were more profitable, rice farms are encouraged to consider using IRMMs to help them improve the quality of their products so that they can be more competitive in the world market.

Keywords:

• rice milling machine
• transaction cost
• profitability
• technical efficiency
• stochastic frontier production
• percentile

Acknowledgement

This research is part of a thesis submitted to the Kwame Nkrumah University of Science and Technology, Kumasi, Ghana in 2019 by Mamoutou Dit Djamba Sissoko for the award of Master of Philosophy degree in Agribusiness Management. The researchers are thankful to him. The authors are also grateful to the anonymous reviewers for AJSTID whose comments were important.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

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