Determinants of allocative (pricing) efficiency of cassava farms in Imo State, Nigeria

Abstract

Globally and particularly across Sub-Saharan Africa of which Nigeria is included, cassava is one of the mostly cultivated and useful root crop. These crop not only contribute to the share of agriculture in national economy, but possess a great potential and comparative advantage to compete in the liberalized economy. Despite all these potentials of cassava, empirical studies on the allocative efficiency of cassava farms have not been fully and systematically documented in the area. Incidentally, most empirical studies on cassava have focused mainly on participation and adoption of cassava technologies. These create a gap in research. Empirical evidence on the allocative efficiency of cassava farm remains largely scanty and isolated. It was on this backdrop that the study was rigorously undertaken. Specifically, the study determined the allocative efficiency of cassava farms. Multistage random sampling technique was used in the selection of respondents. Sample size comprised ninety (90) cassava farms. Well structured questionnaire was the main tool for data collection. Data collected were analyzed using stochastic frontier production model and cost function. The estimated gamma (γ) parameter of stochastic frontier production function showed that about 82.7% variation in output among cassava farmers in the study area was due to differences in relative efficiency. The return to scale (RtS) was 0.549 in the study area. This indicates a positive decreasing return to scale and that cassava production was in stage II of the production region where resources and production were believed to be efficient. The mean allocative efficiency was 0.860. The policy implication of these findings is that cassava farms were efficient in allocating their resources considering their scope of operation and the limited resources in the study area. It was recommended that farmers particularly on their own should judiciously pool productive resources together through strengthened and stable cooperative society group as this would enhance their relative efficiencies in cassava production positively in the area.

Keywords: Allocative efficiency; Cassava; stochastic frontier production model; Imo State