Technical Efficiency of Small Scale Farmers


Book Description

This study aimed at assessing the technical efficiency of fish farmers in Ibadan metropolis of Oyo State, Nigeria using the stochastic frontier production function analysis. Primary data were collected using a set of structured questionnaire from 82 fish farmers in Ibadan metropolis, Oyo State, Nigeria. The stochastic frontier function estimated for the 82 respondents showed that the mean efficiency value was 0.906. Majority of the fish farmers of about 65.9 percent are over 90 percent efficient and about 34.1 percent had technical efficiency ranging from 50 percent to 90 percent, based on the use of input. The distribution of results also showed that fish farmers in Ibadan metropolis are more efficient in the use of inputs though not all the inputs. There are farmers who gain more by reducing the inputs (e.g. labour use) for the same level of output. Changing the input combinations can thereby increase the farm level of efficiency. The farmers in the study area therefore need to use their available input intensively and rationally so as to produce better output and be technically efficient.




Estimating financing gaps in rice production in southwestern Nigeria


Book Description

This study analyzed the financing gaps relative to production frontier of rice farmers in Southwestern Nigeria. A multistage sampling technique was used to collect cross sectional data from 360 rice farmers selected from three States in the region. A Cobb-Douglas stochastic frontier and an adapted form of Harrod-Domar (HD) Growth model was employed to determine the financing gap required for the farmers to be at the frontier level. The empirical results of the frontier model show that quantity of labor, quantity of rice as planting material and herbicides were statistically significant in explaining the variations in the efficiency of rice production in Nigeria. However, age, gender, farming experience, household size, access to credit, access to information, adoption of improved variety and location of rice farmers as sources of technical inefficiencies. As revealed by the result of the HD growth model, the average amount of credit per season that farmers had access to was, ₦38,630.56 while the mean financing in the form of credit required to produce at the frontier level was ₦193,626.50, showing a financing shortfall of about 80%. As unravelled by the result of the study, it can thus be concluded that technical efficiency of rice farmers can be improved by improving access to timely credit and agricultural information for improving rice productivity. These findings suggest that filling the financing gap of smallholder rice farmers will improve rice productivity in Nigeria. The study, therefore, recommends that strengthening the existing technology by building farmers’ capacity on farm management practices would be surest means of improving rice productivity growth in Nigeria. This would not only contribute to the intensification of rice production in Nigeria to meet its increasing rice demand, but also improve rice farmers’ productivity and their households’ incomes.







Identification of Factors Which Influence the Technical Inefficiency of Indian Farmers


Book Description

The agricultural production of Indian farmers is investigated using a stochastic frontier production function which incorporates a model for the technical inefficiency effects. Farm-level data from the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) are used. Variables considered in the model for the inefficiency effects include the age and level of education of the farmers, farm size and the year of observation. The parameters of the stochastic frontier production function are estimated simultaneously with those involved in the model for the inefficiency effects. This approach differs from the usual practice of predicting farm-level inefficiency effects and then regressing these upon various factors in a second-stage of modelling. The results indicate that the above factors do have a significant influence upon the inefficiency effects of farmers in two of the three villages considered.




Cost and Production Functions


Book Description

This study is the result of an interest in the economic theory of production intermittently pursued during the past three years. Over this period I have received substantial support from the Office of Naval Research, first from a personal service consulting contract directly with the Mathematics Division of the Office of Naval Research and secondly from Project N6 onr-27009 at Princeton Univer sity under the direction of Professor Oskar Morgenstern. Grateful acknowledgement is made to the ·Office of Naval Research for this support and to Professor Morgenstern, in particular, for his interest in the puolication of this research. The responsibility for errors and omissions, how ever, rests entirely upon the author. Professor G. C. Evans has given in terms of a simple total cost function, depending solely upon output rate, a treatment of certain aspects of the economic theory of production which has inherent generality and convenience of formulation. The classical approach of expressing the technology of production by means of a production function is potentially less restrictive than the use of a simple total cost function, but it has not been applied in a more general form other than to derive the familiar conditions between marginal productivities of the factors of produc tion and their market prices.




Measurement of Technical Efficiency of Small Scale Farmers Under the Growth Enhancement Scheme in Oyo State, Nigeria


Book Description

The study investigated the technical efficiency of small-scale farmers under the growth enhancement scheme in Egbeda and Surulere Local Government Areas of Oyo State. Multistage sampling technique was used in the random selection of 250 respondents using copies of a structured questionnaire. The result of average input used of respondents was farm size (1.59ha), labor used (23 man-days), seed (30 kg), years of education (6.23 years), fertilizer (259.69 kg), and seasonal extension contact (7) while the average input per farm was 4,162.89 kg. Efficiency of farmers was influenced by the significant input variables such as farm size (3.3749), fertilizer (0.2094), and experience were significant at 1% while years of education (0.6038) and agrochemicals (0.0846) were significant at 1% and 10%, respectively. The distribution of efficiency score showed that farms within the range of 0.81-0.90 were highest with 62.4%. It was, therefore, recommended that policy that will stimulate more extension services and labor availability to improve on output.




Mismeasurement and efficiency estimates: Evidence from smallholder survey data in Africa


Book Description

Smallholder agriculture in sub-Saharan Africa is commonly characterized by high levels of technical inefficiency. However, much of this characterization relies on self-reported input and production data, which are prone to systematic measurement error. We theoretically show that non-classical measurement error introduces multiple identification challenges and sources of bias in estimating smallholders’ technical inefficiency. We then empirically examine the implications of measurement error for the estimation of technical inefficiency using smallholder farm survey data from Ethiopia, Malawi, Nigeria, and Tanzania. We find that measurement error in agricultural input and production data leads to a substantial upward bias in technical inefficiency estimates (by up to 85 percent for some farmers). Our results suggest that existing estimates of technical efficiency in sub-Saharan Africa may be severe underestimates of smallholders’ actual efficiency and what is commonly attributed to farmer inefficiency may be an artifact of mismeasurement in agricultural data. Our results raise questions about the received wisdom on African smallholders’ production efficiency and prior estimates of the productivity of agricultural inputs. Improving the measurement of agricultural data can improve our understanding of smallholders’ production efficiencies and improve the targeting of productivity-enhancing technologies.




Three Essays on Technical Efficiency of Smallholder Farmers


Book Description

In the first chapter of the dissertation, we estimate the impacts of controlling for environmental production conditions on smallholder farmers' technical efficiency in Ethiopia for maize, sorghum and wheat farming. We use a household panel dataset with annual and cropping season environmental production conditions data. Our results show that accounting for environmental production conditions in the stochastic frontier helps to determine the sources of inefficiencies which may otherwise be ignored or overestimated. The mean estimates of the technical efficiency scores differ when we control for environmental production conditions during the cropping season and annually. The second chapter of the dissertation examines the efficiency of smallholder farmers who adopt improved maize using agricultural household data from Ethiopia. We find that smallholder farmers are becoming more efficient in growing improved seeds than local varieties even though there are still some inefficiencies. The mean technical efficiency of improved maize farmers increases by 2.9%. For improved open pollinated varieties, it increases by 9.21%. We attribute the increase in efficiency to the changes in agricultural systems of most Sub-Saharan African countries. Therefore, given that the dissemination and adoption of improved seeds is increasing in Africa, efforts should be made to assist smallholder farmers to be more efficient in growing these seeds. The third chapter provides an insight into the efficiency of peanut farmers in Haiti. We use the stochastic production frontier to show how the agricultural training program impacts the efficiency of smallholder peanut farmers in Haiti. Specifically, we estimate the technical efficiency of farmers enrolled in the training program offered by a for profit organization and those who qualify to enroll but chose not to. Our results indicate that the program had positive effect on the efficiency of peanut farmers during the spring growing season. Farmers who enrolled in the spring season had efficiency scores of 36% more than those who chose not to enroll. Further, we find a large gap in efficiency scores between farmers who enrolled in the fall and spring growing seasons, suggesting that environmental variables should also be included in farm efficiency studies.