What Drives Smallholders' Productivity in Pakistan's Horticultural Sector?

Abstract

Smallholders are indispensable to ensuring food security in the developing economies where they farm. Policy interventions often target smallholders to provide for example, input subsidies, extension services and access to credit, because increased total factor productivity (Hsieh & Klenow, 2009) can ensure that they are better placed to support food security. However, the impact of such interventions and the drivers of TFP growth are largely unknown due to lack of comprehensive data and appropriate methodology. To overcome these impediments, we propose an econometric estimation of the components of TFP growth in a Bayesian set-up and apply this to new farm-level survey data of smallholders from Pakistan’s horticulture sector. The results indicate large technical and mix efficiency differentials across agro-climatic zones and farm sizes. These disparities in technical and mix efficiency are due to suboptimal farm practices, potentially from limited access to and adoption of technology. Government policy makers, support agencies, farmer groups and other stakeholders have latitude in providing adequate education and training programs aimed at improving input-use efficiency and introducing innovative practices leading to TFP growth. Show more