Economic Efficiency Analysis of Pineapple Production in Edo State, Nigeria: A Stochastic Frontier Production Approach

Abstract

This study analyses farmers’ overall efficiency in pineapple production in Edo State, Nigeria. Data were collected through well structured questionnaire administered on 175 pineapple farmers selected using a multi-stage sampling technique and analyzed using descriptive statistics and the stochastic frontier production and cost function models. Result revealed that while farm size and labour significantly influenced production efficiency, the cost of farm, suckers and output were significant in influencing cost efficiency. Average technical, allocative and economic efficiencies of the farmers were 0.70, 0.68 and 0.64 respectively indicating ample opportunity for farmers to increase their productivity. The return to scale (RTS) for the production function revealed that the farmers operated in the rational zone (stage II) of the production surface having an RTS of 0.52. The analysis further indicated that the presence of technical and allocative inefficiencies had effect on pineapple production as depicted by the significant estimated gamma coefficient of each model and the predicted technical and allocative efficiencies within the farmers. The study recommends the need to increase output through more intensive use of land, availability of high yielding pineapple varieties and the effective and efficient utilization of labour and fertilizer inputs. It also recommends that farmers be encouraged to join cooperatives and extension services should intensify their efforts in training and mobilizing farmers for improved pineapple production. An easier access to credit from formal sources, notably micro-credit institutions and farmers’ education are essential to improve productivity and profitability of pineapple production in Nigeria. Policies that focus on ways of attracting and encouraging the youths who are agile and stronger to embark on pineapple production should be pursued such as the setting up of fruit processing factories or industries in the rural areas.