Significant gains can be made if smallholder farms’ households can change their livelihood strategy. This paper is concerned with how smallholder farmers allocate labour within their farms and the barriers to cropping activities with higher outcomes. Efficiency of households in labour use across the farm was evaluated by comparing labour returns across various crops while controlling the variability in bio-physical characteristics of plots. The expectation was that returns to a single factor of production would be equal, an indication that households are likely to benefit from interventions aimed at improving their livelihood. The results obtained reveal that farmers allocate comparatively, more labour to food crops than to market-oriented crops. This suggests that labour mobility within smallholder farms is constrained. Interventions which reduce the marketing costs for food and cash crops; increase participation in labour markets; and improve other rural markets like the financial will, relax the labour constraint thereby empowering smallholder farms’ households to allocate labour more efficiently on their farms.
Key words: Marginal product of labour, allocative efficiency, within farm, Kenya.
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