Efficiency and employment effects of GM Maize producers in KwaZulu Natal

Abstract

This study uses data for 2006/07, for the Hlabisa, Dumbe and Simdlangentsha districts in KwaZulu Natal, to investigate the relative efficiencies of conventional, insect resistant (Bt) and herbicide tolerant (RR) maize grown by small farmers. The paper fits a stochastic efficiency frontier using maximum likelihood methods. The results show that both GM technologies have very little impact on efficiency and that the tillage system is an important determinant of efficiency levels. This is despite the fact that farmers using herbicide tolerant seed have yields that were 85% higher. The cost of the seed cancels out this gain in the efficiency estimates and there is every reason to believe that these are the best farmers. The employment effects of the GM technologies are also investigated, as the RR technology is intended to be labour saving and used in conjunction with the minimum tillage method, locally known as planting without ploughing.