The Role of Economic and Social Factors Affecting the Efficiency of Small-Scale Sunflower Oil Production Companies in Tanzania

Abstract

Most developing nations, including Tanzania, consider agro-processing a key to industrialization. Despite an attractive sunflower seed yield, Tanzania's sunflower oil processing and production have been staggering over the years. Sunflower oil production is inefficient, which leads to low output. So, this research studied sunflower oil production technical efficiency in the Singida region. The study examined the social and economic factors that affect technical efficiency in small-scale sunflower oil producers. It applied cross-sectional design and secondary data for the years 2016–2017, which were collected from the Central Zone Sunflower Oil Processors Association and Small Industrial Development Organization based on Singida sunflower oil producers. It also used stochastic frontier analysis and multiple linear regressions to find the empirical economic relationship between the variables. Sunflower oil producers averaged 30.1% less technical efficiency, as the average was 69.9%. It also revealed that labor, seed, capital, and electricity affect production, while age, experience, education, and locality also matter. Finally, processing techniques, socio-economic, and demographic differences affect sunflower oil production. So, producers must increase capital inputs to be technically efficient. Consider boosting producer capacity and abilities and observing a minimum number of productive staff.