Analysis of Technical Efficiency of Smallholder Cocoa Farmers in Cross River State, Nigeria

Abstract

The technical efficiency involved in cocoa production in Cross River State was estimated using the stochastic frontier production function analysis. The effects of some selected socio- economic characteristics of the farmers on the efficiency indices were also estimated. The study relied upon primary data generated from interviewing cocoa farmers using a set of structured questionnaire. A multi-staged random sampling technique was adopted in selecting two hundred (200) cocoa farmers from Ikom Agricultural Zone in the state. The data on the socioeconomic characteristics of the farmers were analyzed using descriptive statistics, while the stochastic production function, using the Maximum Likelihood Estimating (MLE) techniques was used in estimating the farmer’s technical efficiency and their determinants. Result of the analysis showed that farmers were experiencing decreasing but positive returns to scale in the use of the farm resources. The efficiency level ranged between 0.20 and 0.93 with a mean of 0.69. The result of the generalized Likelihood Ratio (LR) tests confirmed that the cocoa farmers in the area were technically inefficient. The major contributing factors to efficiency were age of farmers, farm size, level of education, sex of farmer and age of the farms. The study observed that there is enough room to improve efficiency with the farmers’ current resource base and available technology and concluded that policies that would directly affect these identified variables should be pursued.