Profit Efficiency of Integrated Crop-Livestock Production Systems in the Transitional belt of Ghana

Abstract

This paper is to evaluate the profitability of the integrated crop-livestock production system with the sole crop and sole livestock systems to guide investment decisions of smallholder integrated crop-livestock farmers in Ghana. Using data from 200 integrated crop-livestock farmers, 100 sole crop farmers and 100 sole livestock farmers in Ejura-Sekyedumase and Atebubu-Amantin districts; descriptive statistics, gross margin analysis and the translog stochastic profit frontier model with inefficiency effects were used to examine the profit efficiency of the three production systems. The empirical results reveal that even though farmers under the three systems are generally profit efficient, those under the integrated crop-livestock system are more profit efficient. Whereas farmer’s age has a significant negative effect on profit efficiency, non-farm income improves profit efficiency significantly. The integrated crop livestock production system is therefore recommended for young farmers in the transitional zone of Ghana to improve their competitiveness in agricultural production for increased income and livelihoods.