Economic Efficiency of Irrigated Vegetable Production in Borno State Nigeria: A Stochastic Frontier Cost Function Approach

Abstract

This study analysed the economic efficiency of irrigated vegetable producers in Borno State, Nigeria. Multistage sampling technique was used to select the respondents. Structured survey questionnaires were used and administered to 300 respondents to obtain primary data. Both descriptive and inferential statistics were used to analyze the data obtained. Descriptive statistics used were mean, frequency and percentage. The inferential statistics used was stochastic frontier cost function to analyze the level and determinants of economic inefficiency in the studied enterprises. The result of the socio-economic indicated that almost all (99.7 percent) of the respondents were male with 45.9 percent of them falling on the age range between 41-50 years. About 46 percent of the respondents had household size ranging between 6-10 persons. The result further disclosed that 70.9, 54.4 percent had less than 5 years of formal education, 54 percent had farming experience of 11-20 years in vegetable production and 28.7 percent had rented or leased their farm. About 28 percent of the respondents had farm size of 0.51- 1.00 hectare of land for cultivation, most of the respondents cultivate onion/tomato mix of the studied vegetable and 65 percent do not belong to any farmers association. Mean economic efficiency of the irrigated vegetable enterprises were 0.72, 0.86, 0.73, 0.78, and 0.78 for sole onion, sole tomato, sole pepper, onion/tomato and onion/pepper respectively. The maximum likelihood estimates of the cost function indicate sigma square values of 0.248, 0.031, 0.363, 0.228 and 0.122 for sole onion, sole tomato, sole pepper, onion/tomato and onion/pepper respectively and significant at one percent. Variance ratio (gamma) values indicate presence of economic inefficiency in irrigated vegetable production in the study area with coefficients of 0.945, 0.932, 0.945, 0.173 and 0.122 for sole onion, sole tomato, sole pepper, onion/tomato and onion/pepper enterprises respectively. The coefficients of production variables in the stochastic frontier cost function were positive and significant at one percent level. The most significant variables were costs of labour, planting materials, depreciation, seeds/seedling and fuel and maintenance. The economic inefficiency variables also showed negative coefficient and significant at different levels. The study concluded that there was economic inefficiency in irrigated vegetable production in the study area despite high levels of economic efficiencies among the studied farmers. It is recommended that there is need for the concerned agencies to promote both formal and none-formal education. It is recommended that government should provide support in respect to price stability, good market facilities and market information to enhance efficiently of vegetable production in the study area.