Accounting for agricultural productivity growth in rice farming: Implication for agricultural transformation agenda in Nigeria

Abstract

This study engaged both Stochastic Frontier and Data Envelopment Analyses in estimating technical efficiency and productivity growth respectively among rice farmers in Nigeria. The underlying data for the study were derived from the households’ panel survey conducted by NISER in collaboration with Lund University, Sweden under the African Food Crisis studies carried out in 2002 and 2007, respectively. The Stochastic frontier t technical efficiency analysis showed that all coefficients of the explanatory variables were significant between 1 and 5% but elasticity estimates showed the inelasticity of output with respect to land, labour, seed and fertiliser and a high gamma value of 0.835, signifying that much of the variation in the composite error term was due to inefficiency. The mean technical efficiency of the farmers under the assumption of constant returns to scale were estimated to be 0.66 and 0.53 respectively for periods 1 and 2 which indicated that the farmers fell short of the frontier by 34 and 47% in periods 1 and 2, respectively. The result further showed that technical efficiency of the farmers also declined by 16% between periods 1 and 2. Productivity growth analysis between the two periods suggested a decline as overall productivity reduced by 33% and the decomposition of the productivity into various components showed that only scale efficiency made significant contribution as the contribution of each of the other components is less than one. The result of the total factor productivity measure obtained by Fisher Index in period 2 was 0.85 in reference to period 1 which implied that rice farmers in period 2 have a productivity gap of 25% to match the technology of best production. The various analyses carried out in this study pointed to the fact that, in spite of various policies and programmes implemented between 2002 and 2007 to improve productivity in the agricultural sector in Nigeria, the expected result was constrained by inefficient use of resources and inability to minimize the cost of production which resulted in low technical efficiency. Therefore, achieving agricultural transformation in Nigeria will required more efforts at increasing the technical efficiency of the farmers and this can only be achieved through efficient utilization of productive inputs.

Keywords: Agricultural productivity, technical efficiency, growth, rice, transformation agenda.