ANALYSIS OF ALLOCATIVE EFFICIENCY AMONG SMALL-SCALE RAIN-FED RICE (Oryza sativa) FARMERS IN ADAMAWA STATE, NIGERIA

Abstract

The research estimated the allocative efficiency among small-scale rain-fed rice
farmers in Adamawa State, Nigeria. A multi-stage random sampling technique was used to select
362 rain-fed rice farmers in eight Local Government Areas of Adamawa State. Stochastic frontier
production cost function was employed for the analysis of the data. Maximum Likelihood Estimate
of the stochastic frontier production cost function revealed that all the variables included in the cost
function had the expected positive signs. This suggest that there is a positive relationship between
the total cost of production and the cost of these variables. Cost of seed, labour, herbicides and
output of rice carried the expected sign and were significant at varying degrees of probability and
the gamma (ϒ) coefficient of 87% implying that these variables contributed 87% of the total cost of
rice production incurred by the farmers included in the model. The allocative efficiency among the
farmers ranged between 0.52 - 0.98 with a mean of 0.83, indicating that there is a scope for
improving allocative efficiency by 17% given the prices of these inputs. Age of the farmer, literacy
level, farming experience, seed variety and primary occupation were found to reduce cost
inefficiency among the farmers. The study, recommends revitalization of formal education and
accessibility to improved seed varieties to the farmers through government agricultural
transformation agenda