Sources of efficiency, productivity and output growth in Botswana agriculture

• Author: Omphile Temoso,Renato Villano,David Hadley
• Date: 01 August 2018
• Published date: 01 August 2018
• DOI: http://doi.org/10.1111/rode.12376

REGULAR ARTICLE

Sources of efficiency, productivity and output

growth in Botswana agriculture

Omphile Temoso

|

David Hadley

|

Renato Villano

University of New England, Armidale,

NSW, Australia

Correspondence

Omphile Temoso, UNE Business School,

University of New England, Armidale,

NSW, 2351, Australia.

Email: otemoso2@une.edu.au

Abstract

The purpose of this study is to explore reasons for the

decline in agricultural performance in Botswana that has

occurred during the implementation of a variety of policy

measures, as well as the introduction of new technologies,

and to identify ways in which it might be reversed.

Panel data from six regions in Botswana (period 1979–

2012) is analyzed with a stochastic output distance func-

tion and inefficiency effects model. We decompose agri-

cultural output growth into; total factor productivity

(TFP) and changes in input use (factors of production).

TFP is further decomposed into scale effects, technical

efficiency and technological change. The results show

that over the study period agricultural output grew at a

very low rate of 0.072 percent per year, which is largely

due to a growth in factors of production at 0.071 percent

per year rather than TFP growth (which declined at 0.003

percent per year). We found that the decline in productiv-

ity has been due to technological regress and low growth

in technical efficiency and scale efficiency. Policy options

aimed at improving agricultural productivity and output

growth will require the strengthening of extension ser-

vices; improving the agronomic and husbandry manage-

ment skills of farmers through training; and by

encouraging farmers to adopt and utilize technologies that

have been provided under existing policy programs.

DOI: 10.1111/rode.12376

Rev Dev Econ. 2018;22:1105–1124. wileyonlinelibrary.com/journal/rode ©2018 John Wiley & Sons Ltd

|

1105

1

|

INTRODUCTION

Agriculture in Botswana continues to perform poorly and its contribution to growth and the econ-

omy continues to deteriorate despite extensive support from the Government (Bank of Botswana

[BoB], 2014). This poor performance has led to a fall in real wages compared with other sectors,

such as manufacturing and services, and hence an increase in labor migration to urban areas

(Yaron et al., 2012). In addition, low agricultural productivity has brought about a progressive

increase in food imports (including imports of staples such as sorghum, maize, and millet—Statis-

tics Botswana, 2014, 2015).

1

Increasing pressure on natural resources and the environment; the

vulnerability of agriculture to external shocks such as climate change (e.g., recurring drought con-

ditions that prevail in many parts of the country) and the predominance of smallholder farming are

some of the factors that contribute to low agricultural output (Seleka, 2005; Burgess, 2006; Bahta

& Baker, 2015; Temoso, Hadley, & Villano, 2016).The consequence of low productivity in agri-

culture is that it prevents farmers from earning significant returns from their enterprises and hence

reduces farm incomes (Temoso, Villano, & Hadley, 2015). Also, low agricultural productivity

poses challenges for the efforts by government aimed at reducing unemployment and poverty and

improving food security (Sigwele & Orlowski, 2015), since the sector remains the single most

important activity in rural areas where there is a general lack of diversity in sources of livelihoods

(Seleka & Lekobane, 2017).

The decline in agricultural performance in Botswana in the last 30 years (1979 to 2012) has

occurred during the implementation of a variety of policy measures as well as the introduction of

new technologies designed to improve that performance. Government expenditure on agricultural

schemes since 1980 is estimated to be equivalent in size to about 40 percent of agricultural GDP

(Thirtle, Piesse, Lusigi, & Suhariyanto, 2003; Irz & Thirtle, 2004), which is well above the aver-

age (25–29 percent) for Sub-Saharan Africa (SSA) (Fan, Omilola, & Lambert, 2009). Despite such

levels of investment there is evidence that relative to other SSA countries Botswana has been one

of the worst performing countries in terms of productivity (Fuglie & Rada, 2013). Among South-

ern African countries, Botswana and Namibia (the two most arid countries) rank last in terms of

agricultural productivity and contribution to GDP (Fuglie & Rada, 2013). Fuglie and Rada (2013)

estimated that for the period 1985 to 2008 agricultural productivity in Botswana declined by 0.14

percent per annum as compared with average growth of 0.92 percent per annum for SSA as a

whole. The neighboring countries of South Africa and Zimbabwe have experienced high productiv-

ity growth and hence have been the biggest exporters of agricultural produce in Africa.

2

According

to Thirtle et al. (1993), the rapid growth in agricultural TFP in Zimbabwe was attributed to adop-

tion of green revolution technologies in the 1980s by commercial farmers, which also spread to

the communal areas. Conversely, the poor performance of agriculture in Botswana can be attribu-

ted to frequent droughts, low rainfall and unsuitable soils (Temoso, Villano, & Hadley, 2015), and

low levels of adoption of improved technologies (Seleka & Lekobane, 2017).

Although the contribution of the agricultural sector to overall GDP in Botswana is small, the

sector remains a significant source of food, income and informal employment for the majority of

rural households (Statistics Botswana, 2015; Seleka & Lekobane, 2017).

3

It is also an important

supplier of raw materials for agro-based industries such as milling, breweries, and meat industries.

Therefore, increasing agricultural productivity remains a key factor in improving the welfare of the

majority of the rural population and in the economic diversification of Botswana away from the

mining sector (Sigwele & Orlowski, 2015).

The purpose of this study is to explore reasons for the decline in agricultural performance in

Botswana that has occurred during the implementation of a variety of policy measures, as well as

1106

|

TEMOSO ET AL.