Production Efficiency of Smallholder Rice Farms under Contract Farming Scheme in Ghana

Abstract

Aims: The study investigated the production efficiency of smallholder rice farms under Contract Farming and irrigation production in Ghana. Methodology: Data was collected from 350 rice farmers selected through a stratified sampling technique using structured questionnaires. Descriptive and inferential statistics including stochastic frontier analyses were used to analyse the data. Results: Contract Farms have higher efficiencies compared to Non-Contract Farms. There are differences in the efficiency distribution of Contract and Non-Contract Farms. The efficiencies of Contract Farms are significantly higher than the efficiencies of Non-Contract Farms under irrigation production and they also have different efficiency distributions. Under the rain fed production frontier, efficiencies of Contract Farms are significantly higher than the efficiencies of Non-Contract Farms and their distributions are different. Contract Farms under irrigation production have higher efficiencies than Contract Farms under rain fed production. The efficiencies of irrigation contract farms are significantly higher than the efficiencies of rain fed Contract Farms, however their distributions are similar across rain fed and irrigation production ecologies. Government policies to stimulate contract participation are recommended. We also recommend investment to expand irrigable land area to increase access, as it is one of the reasons why farmers are not practicing irrigation production. Conclusion: CF has positive influence on farm efficiency hence farmers should be encouraged to produce under CF to increase their current efficiency levels thereby increasing their yields. Aside this, efficiency distribution also shows more CF have higher efficiency scores than their NCF counterparts.