Technical efficiency differentials among HIV/AIDS affected farm households in Malawi: Evidence from time variant and invariant inefficiency models.

The Malawi Government has made various attempts to raise the productivity of the agricultural systems in the country. However, the impact of this effort within the context of HIV/AIDS epidemic has not been investigated. This paper examines the levels of efficiency for affected and non-affected small-scale farm households in Malawi. Time-variant and invariant inefficiency models of production were used. Results show that the technical efficiency levels for non-affected households were higher than those of the affected households. In general, Malawian farmers are technically efficient, implying that government policy of subsidising hybrid maize seeds and fertilisers since the 2006/06 agricultural season enhanced technical efficiency of small-scale farmers. Nevertheless, there was more scope for improvement of the productivity as some farm households, particularly affected female headed households that had cases of mortality of a prime adult member, were still operating at low levels of efficiency. Two main policy issues emerge from this study. First, all types of obstacles that could limit the use of farm inputs should be removed. This should include complete liberalisation of purchase and distribution of such inputs and the development of some low-cost technology to reduce labour constraints on the farm. Second, there is need to develop social capital in smallholder farming through the recommencement of farmers’ clubs, or by setting up agricultural cooperatives. Key Words: Fertilisers, social capital, subsidiary, technical efficiency