The selection of a suitable model for efficiency analysis is one of the most importantissues in policy analysis. Given the recent interest in the use of distance functions asalternative representation of production technology, this study compares the empiricalperformances of the parametric stochastic input distance function to its nonparametriccounterpart, data envelopment analysis. A further comparison is madebetween the alternatives of a distance and production function frontiers. It furtherintegrates efficiency scores from the consistent approaches in order to evaluate theperformance of the sampled farm households and for analysis of policy impacts ontechnical, allocative and cost efficiency. The usefulness of the proposed methodologyis applied to smallholder maize production in Benue State Nigeria. The maize subsectorhas featured in a number of Nigerias policy initiatives, the most current ofwhich involves doubling of its production and productivity through promotion ofimproved technologies such as hybrid seed, inorganic fertilizer, pesticides, herbicides,and better management practices. Despite the policy initiatives, maize productivityhas remained low raising questions about the efficiency of resource use by farmersand the benefits of Nigerias technology policy. The study used data obtained from afield survey for the 2008/2009 agricultural year. A multistage stratified samplingtechnique was employed in selection of respondents. A total of 240 maize farmhouseholds were randomly selected and interviewed using structured questionnaires.
Results from all the approaches indicated considerable technical, allocative and costinefficiency under both traditional and improved maize technology. Technicalefficiency estimates range from 80 to 87 percent. Allocative efficiency estimatesrange from 53 to 74 percent while cost efficiency estimates range from 45 to 62percent. The results from all the approaches indicated that inefficiency in maizeproduction in Benue State is dominated by cost inefficiency suggesting the immensepotential of enhancing production through improvement in overall efficiency. Theoverall consistency check shows that technical, allocative and cost efficiencymeasures from the three distance functions were consistent whereas similarconclusions could not hold when these were compared to the production frontierespecially for technical efficiency estimates.
Given the consistency of results from the parametric and non-parametric distancefunctions, an integrated input distance model was developed for providing finalefficiency estimates and analysis of policy impacts. The results show that bothtraditional and improved technology users were technically, allocatively and costinefficient. The average technical, allocative and cost efficiency are 84.2, 65.7 and54.5 percent, respectively implying that there is a possibility of raising maizeproduction by 45.5 percent through overall efficiency improvement. Under theintegrated approach, the study revealed that hybrid seeds, inorganic fertilizer andconservation practices have positive and significant impact on farm efficiency. Otherdeterminants of efficiency include education, age, household size, land size, credit,and membership in a farmer group. The findings justify the need for further publicinvestment in maize technology development and proper implementation of therelevant policies in order to enhance the efficiency with which maize has beenproduced thereby increasing its productivity, food security and farm incomes andsubsequently reducing poverty in Nigeria.
© 2011 University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria.
Please cite as follows:
Aye, GC 2011, Sensitivity and integration of efficiency estimates from input distance functions and stochastic production frontiers : application to maize production in Benue State Nigeria, PhD thesis, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-10182011-110217/ >
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