Profit efficiency among catfish farmers in Benue state, Nigeria

Abstract

The study examined profit efficiency among catfish farmers in Benue State of Nigeria using a stochastic profit frontier approach. A multi-stage sampling technique was used to collect data from 143 catfish farmers through a well structured questionnaire. The study used a Cobb-Douglas stochastic profit frontier function to analyze the data and was estimated using a computer software, FRONTIER 4.1 version. The estimated elasticity parameters of variables with respect to gross profit of catfish farmers revealed the significance of all the independent variables included in the stochastic profit function. However, the number of ponds (-0.02), cost of feed (-0.30), cost of fingerlings (-0.11) and cost of hired labour (-0.004) had an inverse relationship with the profit of farmers with cost of feed being the most important variable decreasing the profit of farmers in the study area. The negative elasticity of number of ponds with respect to farmers’ profit was likely due to under-utilization of ponds capacity. The result further indicated that the kilogramme of catfish produced (elasticity of 1.43) was the most important variable determining profit in catfish farming in the study area. Analysis of profit efficiency revealed a varied (23-99%) profit efficiency of the farmers with a mean value of 0.84. This implies that the farmers were able to obtain a little above 80 percent of their potential profit from a unit mix of inputs. This means that about 16 percent of the profit is lost due to inefficiency of management. Thus, in the short run there is scope for increasing profit from catfish production by 16 percent by adopting the technology and the techniques used by the ‘best practiced’ catfish farmers. Analysis of the factors influencing profit efficiency revealed that while age of famers, farming experience and duration of culture positively influenced profit efficiency, years of education, off-catfish-farm income, and training negatively influenced profit efficiency. The policy implication of these findings is that profit inefficiency in catfish production can be reduced significantly overtime as the farmers get more experienced and a more conducive environment is created, to encourage more aged farmers to be involved in catfish production in a bid to alleviate poverty and food insecurity in the state and the country at large.

Keywords:Profit Efficiency, Catfish, Stochastic Frontier

African Journal of Food, Agriculture, Nutrition and Development, Volume 12 No. 6