A study analysing the technical efficiency of oyster mushroom farms in kampala metropolitan area, Uganda

Abstract

The study was conducted in Kampala Metropolitan area Uganda in October 2016 and it focused on analyzing the technical efficiency of oyster mushroom farms referred to as Decision Making Units (DMUs) using input oriented Data Envelopment Analysis (DEA), analyzing the factors that determine the efficiency of mushroom farms using Tobit model and carrying out a strength weakness, opportunity and threat (SWOT) analysis of the mushroom industry in Uganda. 52 respondents were interviewed face to face through the use of questionnaires. The study indicates that 8 (15.38%) DMUs are technically efficient which means they operate at most productive scale size while 43 (82.7%) DMUs need to increase their scale to attain optimal production (scale efficiency), and 1 (1.92%) DMU need to decrease their scale in order to gain efficiency. Results from the Tobit model indicate that membership to any organization, the number of bags/gardens cultivated by farmers and the selling price of mushrooms per kilogram are the determinants of the efficiency of DMUs. The SWOT analysis indicates that the mushroom sector in Uganda has high returns on investment within a short period as strength, difficulties in identifying a good spawn breeder to produce high-quality mushroom spawn as weakness, high potential for both local and global markets & high possibilities of creating self-employment for different groups of people as opportunities and lack of adequate qualified advisory and extension personnel on how to grow mushrooms as threats among others. There is a need for inefficient DMUs to reduce the level of inputs in specified amounts in order for them to attain efficiency, address the bottlenecks of the mushroom sector and utilize the opportunities and strengths possessed by the sector to ensure that mushroom cultivation is more efficient, relevant and productive in order to generate more income to the farmers, increase the supply of food and ensuring improved quality of the environment.