Empirical Analysis of Allocative Efficiency among Fadama Food Crop Farmers in Adamawa State, Nigeria

Abstract

The study examined allocative efficiency and its determinants among fadama food crop farmers in Adamawa State, Nigeria using the stochastic cost frontier approach. A single-stage estimation procedure was used where socio-economic variables were incorporated directly into the estimation of the cost frontier model. Data were collected from 160 randomly selected fadama farmers in the state using stratified and purposive sampling techniques. The estimated coefficients of the stochastic cost function revealed that cost of land, cost of agro-chemicals and cost of seeds were statistically significant at 1% level, cost of hired labour and cost of water were significant at 5% level, while cost of inorganic fertilizers was significant at 10% level. The estimated coefficient of the socio-economic variables in the inefficiency cost model shows that farming experience, education and age increases allocative efficiency in fadama food crop production. On the allocative efficiency levels, the result revealed that the farmers were efficient in the allocation of resources in fadama crop production. However, there is a scope for allocative efficiency improvement in the short-run given the current state of technology of 21% and 58% for the average and least efficient farmer respectively. The study recommends the implementation of policies that would improve farmers’ access to credit, timely distribution of productive inputs, subsidization of cost of agricultural inputs and the encouragement of research in fadama food crop farming.