Analysis of Allocative Efficiency among Rice Farmers under Anchor Borrowers’ Programme in Benue State, Nigeria

Abstract

The study analyses the cost efficiency of rice farmers under the Anchor Borrowers’ Programme in Benue State, Nigeria. A multistage sampling technique was used to select 125 beneficiary and 130 non-beneficiary rice farmers under the Anchor Borrowers’ Programme. Data were collected using a structured questionnaire and analysed using descriptive statistics and stochastic frontier cost analysis. The results revealed that the mean ages were 44 and 46 years for beneficiary and non-beneficiary rice farmers, respectively. The average household size was 8 persons for both categories; the average farm sizes were 2.76 and 1.94 hectares for beneficiary and non-beneficiary rice farmers, respectively, and the average farming experience was 11 years for both categories. The results of the stochastic frontier cost function revealed that the total cost of production for beneficiary rice farmers was positively and significantly determined by the costs of farmland and seed at P≤0.01, labour at P≤0.05, and pesticides at P≤0.10. For non-beneficiary rice farmers, the total cost of production was positively and significantly determined by the costs of farmland, seed, fertiliser, herbicides, and pesticides at P≤0.01. The inefficiency-effects results showed that cost efficiency for beneficiary rice farmers increased with sex at P≤0.01 but decreased with extension contact at P≤0.05, while cost efficiency for non-beneficiary rice farmers increased with education at P≤0.10. The mean allocative efficiencies of 38.8% and 62.1% for beneficiary and non-beneficiary rice farmers, respectively, suggest that the allocative efficiency of the farmers can be increased by 61% and 38% under the existing technology. It was concluded that rice production by both categories of farmers in the study area was below the cost frontier (100% cost efficiency). The study recommended increasing farmers’ access to quality education and providing adequate training programmes to enhance their efficiency. It also recommended policies that make credit more accessible to farmers to help address their inefficiency problems.