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.