RELEASE FORM Author : Timba Martha Reg Number : B1440446 Degree : Bachelor of Agricultural Science Honours Degree In Agricultural Economics And Management Project Title : An Analysis of Socioeconomic Factors Influencing Sugarcane Production: A Case of Hippo Valley Out grower Farming Community. Permission is hereby granted to Bindura University of Science Education Library to produce a single copy of this dissertation and lend such copy for private, scholarly or scientific research only. Signed ................................................ Permanent Address: 2990/11 Chechekunde Cres Hillside Masvingo Date : October 2018 i APPROVAL FORM The undersigned certified that they have supervised and recommended to Bindura University of Science Education for acceptance of dissertation entitled… An analysis of socio economic factors affecting sugarcane production: A case of Hippo Valley out grower farming community. Submitted in partial fulfillment of the Bachelor of Agricultural Science Honours Degree in Agricultural Economics and Management Name of supervisor: Mr. N Mafuse Signed ………………………………………………………. Date ………………………...................................................... ii DEDICATION I would like to dedicate this project to my parents and to my little sisters. You are my pillar of strength, always there for me during times of happiness and sadness. Thank you for motivating me and for your financial support during my studies. iii ACKNOWLEDGEMENTS Firstly, I would like to acknowledge greatly the guidance and help from God, thank you for being there for me and continuously blessing me with endless opportunities. Thank you for giving me the strength to pull through each day regardless of the challenges that I faced. I want to thank my parents for their unconditional support through prayers, motivational and financial support, God bless you. To my sisters, your support is highly appreciated. Special thanks goes to my project supervisor, thank you for assisting me when I was doing this project. You contributed a lot to the success of this project, your support is greatly appreciated. God bless you. I would like to thank all the lectures from the department of Agricultural Economics and Extension for their great work and advices and intellectual support on this project. iv ABSTRACT Production of sugarcane in the out grower farming community has been decreasing and remained well below the expected standards. This study sought to investigate the socio- economic factors affecting sugarcane production of out grower farmers in the Lowveld area of Zimbabwe with particular reference to Hippo Valley A2 outgrower farming community in Chiredzi District. The specific objectives of the study were to identify the socio-economic factors affecting sugarcane production, to measure technical efficiency of the sugarcane farmers and to measure the costs and returns of sugarcane (profitability). A sample of 50 farmers was randomly selected and was interviewed with a questionnaire. The following analytical tools were employed for data analysis, linear regression to analyze socio economic factors, stochastic production frontier approach to measure technical efficiency and lastly gross margin analysis was used as a proxy indicator of profitability. Results from the study revealed that farm size, farming experience, age significantly affected yield at 1% level of significance, credit access at 2% level of significance and extension contacts at 3% level of significance. However the following factors were not significant occupation, marital status, level of education and household size. The mean technical efficiency of the farmers was 0.69 meaning farmers are less efficient in sugarcane production. Thus, a mean technical efficiency score of 69% outputs on all the farmers in the area can be increased by 31% through a more effective use of their input bundle given their current state of technology they are using. Thirty-six percent of the farmers have technical efficiency ranging from 0.7 to 0.75. Farmers selected for the study have an average annual revenue of $5652.5 per hectare, variable costs of $5320 per hectare giving them an average gross profit of $332.5 per hectare. The research concluded that the farmers are not technically efficient that’s why they are having high costs of production. The researcher recommends that the interest rates being charged to farmers by financial institutes should be reduced to increase sugarcane production, farmers should be linked to more extension agents and also acquire or rent some land to increase their yields. v TABLE OF CONTENTS RELEASE FORM ............................................................................................................................ i APPROVAL FORM ........................................................................................................................ ii DEDICATION ................................................................................................................................ iii ACKNOWLEDGEMENTS............................................................................................................ iv ABSTRACT ..................................................................................................................................... v LIST OF TABLES......................................................................................................................... viii CHAPTER ONE .............................................................................................................................. 1 INTRODUCTION ........................................................................................................................... 1 1.1 Background of the study ........................................................................................................ 1 1.2 Problem statement ................................................................................................................. 2 1.3 Research questions ................................................................................................................. 3 1.4 Objectives ............................................................................................................................... 3 1.5 Hypothesis .............................................................................................................................. 4 1.6 Significance of the study ........................................................................................................ 4 1.7 Scope and limitations ............................................................................................................. 4 1.8 Organisation of the study ...................................................................................................... 4 CHAPTER TWO............................................................................................................................. 6 LITERATURE REVIEW ............................................................................................................... 6 2.0 Introduction ........................................................................................................................... 6 2.1 Definition of terms ................................................................................................................. 6 2.1.1 Sugarcane production and the Zimbabwean economy ........................................................ 6 2.1.2 Concept of production ....................................................................................................... 6 2.1.3 Production function ........................................................................................................... 6 2.1.4 Efficiency ......................................................................................................................... 7 2.1.5 Profitability ....................................................................................................................... 7 2.2 Sugarcane production trends in Zimbabwe .......................................................................... 7 2.3 Review of empirical studies on sugarcane production .......................................................... 9 2.3.1 Socioeconomic factors affecting sugarcane production ...................................................... 9 2.3.2 Profitability of sugarcane production ............................................................................... 10 2.3.3 Efficiency of farmers in sugarcane production ................................................................. 11 2.4 Summary .............................................................................................................................. 12 CHAPTER THREE....................................................................................................................... 13 METHODOLOGY ........................................................................................................................ 13 vi 3.0 Introduction ......................................................................................................................... 13 3.1 Description of study area ..................................................................................................... 13 3.2 Sampling procedure and sampling size ............................................................................... 13 3.3 Methods of data collection ..................................................................................................