Optimizing sugarcane production in Rwanda: a stochastic frontier analysis of smallholder farmers

Rwanda continues to experience a growing demand for sugar, yet domestic production remains insufficient despite considerable government investments. In 2022, sugarcane production reached 130,000 metric tons, falling short of the estimated national sugar demand of 160,000 to 180,000 metric tons. This production gap creates a persistent supply shortage of 30,000 to 50,000 metric tons, necessitating significant sugar imports. This study investigates the determinants of technical efficiency in sugarcane production among smallholder farmers in Kigali City and the Eastern Province of Rwanda. This study employed a stratified random sampling technique to select a sample of 202 sugarcane farmers. The study collected data through structured questionnaires and an interview schedule. The analysis employed the Stochastic Frontier Production function using Frontier 4.1 software to estimate technical efficiency and examine key influencing factors. The analysis revealed a mean technical efficiency of 80.58%, implying that sugarcane farmers have the potential to increase output by approximately 19.42% using the same level of inputs. The maximum likelihood estimates indicate that input-related factors, such as pesticide use, had a positive and significant effect on technical efficiency, likely due to their effectiveness in managing pests and diseases. In contrast, labor, organic compost, and seed cane had an adverse and significant effects on technical efficiency, potentially reflecting inefficiencies in their use or management. Among institutional and socioeconomic variables, the results revealed that the farmer’s age and access to bank credit were associated with reduced technical inefficiency. In contrast, the findings indicated that access to extension services, cooperative membership, training, land size, and farming experience increased technical inefficiency. Although sugarcane production in Rwanda demonstrates moderate technical efficiency, considerable potential remains for improvement. Targeted interventions to promote efficient input use, expand access to tailored extension services, strengthen cooperative effectiveness, and integrate financial literacy with credit access can enhance productivity. Such measures would help close the production gap, reduce dependence on sugar imports, and improve the livelihoods of smallholder farmers.