Analysis of Policy Issues in Technical Efficiency of Small Scale Farmers Using the Stochastic Frontier Production Function: With Application to Nigerian Farmers

The purpose of this study was to analyse the determinants of technical efficiency of small scale farmers in Nigeria and the effect of policy changes on technical efficiency, using the stochastic frontier methodology. Results of analysis indicates that the farmers have an average farm size of 1.56 hectares. It is also indicated that both family and hired labour were extensively used in farm production. The analysis shows a wide variation in the estimated technical efficiencies, ranging between 0.18 and 0.91, and a mean value of 0.63, indicating a wide room for improvement in the technical efficiency. The results of simulation of policy variables show that the level of technical efficiency would significantly increase with rising level of education and farming experience.