Tag Archives: Technical Efficiency

Analysis of Technical Efficiency of Coffee Production on Small Holder Farmers in Case of Sasiga & Limu Districts of East Wollega Zone (Published)

The study entitled on Analysis of production Efficiency of coffee was conducted using cross-sectional data collected in 2013/14 production year from a total sample size of 200 households from Limu and Sasiga  district of East Wollega zone. The aim of the study was to measure production efficiency of Coffee  and to identify the principal factors affecting efficiency among Coffee producing farmers in the study area. The results of production efficiency were obtained using parametric stochastic production frontier (SPF) model. The results indicate that there was inefficiency in the production of Coffee in the study area and Farmers are efficient for Half -normal and truncated normal distribution about 74% and 89% average score of efficiency respectively while 26% and 21% of output lost due to random shocks.  The mean technical efficiency was about 88%. Econometric results obtained from half -normal and truncated –normal frontier model indicate that labour and land has significant at 1percent level of significance but negative sign which imply efficient farmers has employed lower amount of land and labour inputs. In other case seed and oxen are significant and positive at 1 percent and 5percent respectively implying efficient farmer has higher units of oxen and seed. Increased distance between of plots and Female household head are more efficient than male household head because of better in management of resources . Woina dega/dega farmers are 0.25 times efficient than cola farmers.  There  exists  of   a   positive  and negative association between   land  square  and   fertilizer  square   with  production  efficiency and The second order parameter of interaction between livestock and labour, seed and land , land and fertilizer are   significantly different from zero . The mean production efficiency levels further suggest  that Coffee  growing farmers in the study area could increase their production by 22% given the existing technology and inputs by avoiding production inefficiency. Thus the results suggest that there need to be policies geared towards enhancing production efficiency of farmers so as to enhance their productivity and export-competitiveness of this commodity.   

Keywords: Coffee Production, Small Holder Farmers, Technical Efficiency

Application of a Stochastic Frontier Production Function to the Measurement of Technical Efficiency of Commercial Poultry Egg Production in Nigeria (Published)

Some studies on poultry production in Nigeria focused on problems and prospects of poultry production, part time commercial poultry farming, technical efficiency of small scale poultry-egg production and none on the technical efficiency of commercial poultry egg production in Nigeria This study therefore examined the technical efficiency of commercial poultry egg production in Sapele Local Government Area of Delta State, Nigeria. Primary data were collected using a set of well-structured questionnaire and interview schedule. Multi-stage sampling technique was employed in the study. First, five (5) major towns were randomly selected from the nine (9) major towns in the Local Government Area. Secondly, six (6) commercial poultry egg farmers were randomly selected from each of the five (5) major towns to make a total sample size of 30 farmers for the 2011 production cycle. Data collected were presented and analyzed using tables, frequency count, percentages and stochastic frontier production function. The stochastic frontier production function was specified and estimated, using maximum likelihood estimation. The results showed that majority of the respondents were found to be between the age range of 31-50 years old (60%), 56% of them were males, 50% of them had first leaving school certificates and 50% of them had 5-6 family members, 60% had 3-5 years of poultry rearing experience and 53% of them used hired labour for their operations; 60% of the respondents adopted the deep litter system of management. The results also revealed that the coefficients of expenditure on flock size (0.755), expenses on feed intake (0.851), expenses on medication and vaccination (0.220), expenses on labour (0.201), and cost of capital (0.562) were significant determinants of output of commercial egg production at 5% level of significance in the study area. The mean technical efficiency was 58% and ranges between 0.559 and 0.909. The sigma squared (σ2) of 0.65 for the commercial poultry farmers were statistically significant and different from zero at 5% level of significance. The variance ratio (gamma) was estimated as 0.52 for the farmers and were also significant at 5% level which implied that about 52% variations in the output of the farmers were due to the inefficiency of inputs. The study revealed that a national policy and programme  to strengthen the commercial poultry production is required in the area of finance and inputs. It can therefore be recommended that capital should  be channelled to commercial  poultry production through the provision of macro-credits and formulation of policies and programmes by the Government to direct financial institutions to grant a definite and a reasonable  proportion of loan-able funds to commercial poultry farmers. Programmes on economic production of major poultry feed ingredients like maize and soya-beans be instituted for least cost poultry feed production. Potent medicine and vaccine should be provided in sufficient quantities, easily accessible and enlightenment programme on mode of administration be embarked upon by the government to commercial poultry farmers in the study area. Exotic poultry parent stocks and fertile eggs imported should be screened and certified to be of good quality at the point of entry into the country by controlling bodies. Poultry equipment manufacturers should be encouraged by the Government with provision of credit facilities and subsidies.

Keywords: Commercial poultry eggs, Farmers, Nigeria, Technical Efficiency, stochastic frontier production

Determinants of the Technical Efficiency Performance of Privatized Manufacturing Firms in Nigeria: An Econometric Analysis (Published)

This work is designed to empirically evaluate the determinants of the technical efficiency of ten privatized manufacturing firms in Nigeria. The firms were selected from the numerous firms in the four geo political zones to represent the interest of the entire country due to their age long establishment, size and government equity investment in them. The study adopted  Data envelopment analysis (DEA) and ordinary least square regression  as the techniques of analysis and the period of analysis is five years before and five years after privatization. The efficiency scores generated from the first stage using Data Envelopment Analysis (DEA) was used as dependent variables in the second stage against a set of explanatory variables. The investigation revealed that concentration ratio, size and age of firms were considered as determinant of technically efficiency. It also shows that, concentration ratio will lead to higher monopoly power, with age firms gain experience and with size, firms gain more strength to control or have a larger share of the market. It is recommended that there should be market competition with liberalization of entry conditions, in order to terminate monopoly and allow for new entrants to make operations competitive for production. This will be in line with the industrialization policy.

Keywords: Determinants, Nigeria, Privatized Manufacturing firms, Technical Efficiency

Technical Efficiency of Dreg’s Rice Production in Benin: Case of the Municipality of Savè (Published)

The aim of this article is to study the technical efficiency of the rice producer of dregs of the municipality of Savè and to identify the determining factors of the production of the rice in the optics of a sustainable agricultural productivity. The results of the estimation of the border of production show that the technical efficiency of rice producer is situated between 72.02 % and 98.25 %, with an average technical efficiency of 90 %. The access to the cash credits, the quantity of agricultural inputs, the membership in an agricultural cooperative and the quantity of seed improved by rice determine the technical efficiency of the production of the rice in the municipality of Savé in Benin. These results reveal the existence of the possibilities to improve the agricultural technical training, the academic level and educational. These agricultural practical basic possibilities are necessary conditions to increase better rates of efficacy technique of the production of the rice of dregs

Keywords: Technical Efficiency, agricultural practices, border of possibility, rice of dregs

Application of a Stochastic Frontier Production Function to the Measurement of Technical Efficiency of Commercial Poultry Egg Production in Nigeria (Published)

Some studies on poultry production in Nigeria focused on problems and prospects of poultry production, part time commercial poultry farming, technical efficiency of small scale poultry-egg production and none on the technical efficiency of commercial poultry egg production in Nigeria This study therefore examined the technical efficiency of commercial poultry egg production in Sapele Local Government Area of Delta State, Nigeria. Primary data were collected using a set of well-structured questionnaire and interview schedule. Multi-stage sampling technique was employed in the study. First, five (5) major towns were randomly selected from the nine (9) major towns in the Local Government Area. Secondly, six (6) commercial poultry egg farmers were randomly selected from each of the five (5) major towns to make a total sample size of 30 farmers for the 2011 production cycle. Data collected were presented and analyzed using tables, frequency count, percentages and stochastic frontier production function. The stochastic frontier production function was specified and estimated, using maximum likelihood estimation. The results showed that majority of the respondents were found to be between the age range of 31-50 years old (60%), 56% of them were males, 50% of them had first leaving school certificates and 50% of them had 5-6 family members, 60% had 3-5 years of poultry rearing experience and 53% of them used hired labour for their operations; 60% of the respondents adopted the deep litter system of management. The results also revealed that the coefficients of expenditure on flock size (0.755), expenses on feed intake (0.851), expenses on medication and vaccination (0.220), expenses on labour (0.201), and cost of capital (0.562) were significant determinants of output of commercial egg production at 5% level of significance in the study area. The mean technical efficiency was 58% and ranges between 0.559 and 0.909. The sigma squared (σ2) of 0.65 for the commercial poultry farmers were statistically significant and different from zero at 5% level of significance. The variance ratio (gamma) was estimated as 0.52 for the farmers and were also significant at 5% level which implied that about 52% variations in the output of the farmers were due to the inefficiency of inputs. The study revealed that a national policy and programme  to strengthen the commercial poultry production is required in the area of finance and inputs. It can therefore be recommended that capital should  be channelled to commercial  poultry production through the provision of macro-credits and formulation of policies and programmes by the Government to direct financial institutions to grant a definite and a reasonable  proportion of loan-able funds to commercial poultry farmers. Programmes on economic production of major poultry feed ingredients like maize and soya-beans be instituted for least cost poultry feed production. Potent medicine and vaccine should be provided in sufficient quantities, easily accessible and enlightenment programme on mode of administration be embarked upon by the government to commercial poultry farmers in the study area. Exotic poultry parent stocks and fertile eggs imported should be screened and certified to be of good quality at the point of entry into the country by controlling bodies. Poultry equipment manufacturers should be encouraged by the Government with provision of credit facilities and subsidies.

Keywords: Commercial poultry eggs, Farmers, Nigeria, Technical Efficiency, stochastic frontier production

The Impact of Farmer Field School Training On Farmers’ Technical Efficiency: Evidence from Smallholder Maize Farmers in Oromia, Ethiopia (Published)

This study examines the impact of Farmer Field School (FFS) training program on technical efficiency of smallholder farmers. The FFS program was sponsored by the Ethiopian government and launched in 2010 to scale-up best agricultural practices in the country. The study aims to compare changes in the technical efficiency of those FFS graduate and non-FFS graduate maize farmers in Ethiopia. For this, panel data were collected in two rounds from 446 randomly selected households from three districts consisting of 218 FFS graduate farmers and 228 non-FFS graduate farmers. The analytical procedure has involved three stages: in the first stage, descriptive analyses were used to detect existence of difference in the outcome indicators between the two farmer groups. In the second stage, a semi-parametric impact evaluation method of propensity score matching with several matching algorithms was employed to estimate the program impact. In the third stage, Difference-in-Difference was used as robustness check in detecting causality between program intervention and the technical efficiency changes. The Combined uses of these alternative estimation techniques indicate that the program has negative impact on the technical efficiency of the FFS graduates.  Numerous plausible explanations for this outcome are discussed, and recommendations for improvements are suggested accordingly.  

Keywords: Impact Evaluation, Technical Efficiency, difference in difference, propensity score matching

Application of a Stochastic Frontier Production Function to the Measurement of Technical Efficiency of Commercial Poultry Egg Production in Nigeria (Published)

Some studies on poultry production in Nigeria focused on problems and prospects of poultry production, part time commercial poultry farming, technical efficiency of small scale poultry-egg production and none on the technical efficiency of commercial poultry egg production in Nigeria This study therefore examined the technical efficiency of commercial poultry egg production in Sapele Local Government Area of Delta State, Nigeria. Primary data were collected using a set of well-structured questionnaire and interview schedule. Multi-stage sampling technique was employed in the study. First, five (5) major towns were randomly selected from the nine (9) major towns in the Local Government Area. Secondly, six (6) commercial poultry egg farmers were randomly selected from each of the five (5) major towns to make a total sample size of 30 farmers for the 2011 production cycle. Data collected were presented and analyzed using tables, frequency count, percentages and stochastic frontier production function. The stochastic frontier production function was specified and estimated, using maximum likelihood estimation. The results showed that majority of the respondents were found to be between the age range of 31-50 years old (60%), 56% of them were males, 50% of them had first leaving school certificates and 50% of them had 5-6 family members, 60% had 3-5 years of poultry rearing experience and 53% of them used hired labour for their operations; 60% of the respondents adopted the deep litter system of management. The results also revealed that the coefficients of expenditure on flock size (0.755), expenses on feed intake (0.851), expenses on medication and vaccination (0.220), expenses on labour (0.201), and cost of capital (0.562) were significant determinants of output of commercial egg production at 5% level of significance in the study area. The mean technical efficiency was 58% and ranges between 0.559 and 0.909. The sigma squared (σ2) of 0.65 for the commercial poultry farmers were statistically significant and different from zero at 5% level of significance. The variance ratio (gamma) was estimated as 0.52 for the farmers and were also significant at 5% level which implied that about 52% variations in the output of the farmers were due to the inefficiency of inputs. The study revealed that a national policy and programme to strengthen the commercial poultry production is required in the area of finance and inputs. It can therefore be recommended that capital should be channelled to commercial poultry production through the provision of macro-credits and formulation of policies and programmes by the Government to direct financial institutions to grant a definite and a reasonable proportion of loan-able funds to commercial poultry farmers. Programmes on economic production of major poultry feed ingredients like maize and soya-beans be instituted for least cost poultry feed production. Potent medicine and vaccine should be provided in sufficient quantities, easily accessible and enlightenment programme on mode of administration be embarked upon by the government to commercial poultry farmers in the study area. Exotic poultry parent stocks and fertile eggs imported should be screened and certified to be of good quality at the point of entry into the country by controlling bodies. Poultry equipment manufacturers should be encouraged by the Government with provision of credit facilities and subsidies.

Keywords: Commercial poultry eggs, Farmers, Nigeria, Technical Efficiency, stochastic frontier production

The Impact of Farmer Field School Training On Farmers’ Technical Efficiency: Evidence from Smallholder Maize Farmers in Oromia, Ethiopia (Published)

This study examines the impact of Farmer Field School (FFS) training program on technical efficiency of smallholder farmers. The FFS program was sponsored by the Ethiopian government and launched in 2010 to scale-up best agricultural practices in the country. The study aims to compare changes in the technical efficiency of those FFS graduate and non-FFS graduate maize farmers in Ethiopia. For this, panel data were collected in two rounds from 446 randomly selected households from three districts consisting of 218 FFS graduate farmers and 228 non-FFS graduate farmers. The analytical procedure has involved three stages: in the first stage, descriptive analyses were used to detect existence of difference in the outcome indicators between the two farmer groups. In the second stage, a semi-parametric impact evaluation method of propensity score matching with several matching algorithms was employed to estimate the program impact. In the third stage, Difference-in-Difference was used as robustness check in detecting causality between program intervention and the technical efficiency changes. The Combined uses of these alternative estimation techniques indicate that the program has negative impact on the technical efficiency of the FFS graduates. Numerous plausible explanations for this outcome are discussed, and recommendations for improvements are suggested accordingly.

Keywords: Impact Evaluation, Technical Efficiency, difference in difference, propensity score matching

TECHNICAL EFFICIENCY IN PADDY RICE PRODUCTION IN NIGER DELTA REGION 0F NIGERIA (Published)

This study estimated technical efficiency of rice farmers in Niger Delta region of Nigeria. Multistage sampling technique was used to sample 300 rice farmers. A stochastic frontier production function was used to estimate technical efficiency. The study further assessed the factors that affect technical efficiency of the rice farmers. All the coefficients were found to have positively influenced paddy rice productivity. The level of efficiency of rice farmers was found to be 0.63. The study further found that gender and household size were significant determinants of technical efficiency. The study therefore recommended policies that will ensure that costs of productive inputs are affordable to farmers and improving households’ income through better prices for their output. Provision of labor saving equipment is also important in reducing inefficiencies in paddy production through reduction in labor cost.

Keywords: Niger-Delta, Nigeria, Rice, Stochastic Frontier Production Function., Technical Efficiency

Impact of Small-scale Irrigation on Farm Households’ Technical Efficiency: The Case of Girawa District, East Hararghe, Oromia, Ethiopia (Review Completed - Accepted)

This study evaluated the impact of small-scale irrigation on farm households’ technical efficiency of production in Girawa district, East Hararghe, Oromia, Ethiopia. Both primary and secondary data were collected for the study. Primary data were collected from 200 sample respondents drawn from both participant and non-participant households. Econometric models were employed for data analysis. Stochastic production frontier model was used for technical efficiency estimation and Propensity score matching method was applied to analyze the impact of small-scale irrigation on the technical efficiency. The logistic regression was employed to estimate propensity scores. In matching processes, kernel matching with band width of 0.5 was found to be the best matching algorism. This method was also checked for covariate balancing with a standardized bias, t-test, and joint significance level tests. The results revealed that households that participate in irrigation practice have got an improvement of 8.92% in technical efficiency than those households that were not participating in irrigation practice. Results showed that participation in irrigation has a significant, positive and robust impact on the outcome variables. The sensitivity analysis also showed that the impact estimates are insensitive to unobserved selection bias. All results obtained from different models revealed the positive impact of irrigation on farm household technical efficiency. Therefore, policy makers should give due emphasis to the aforementioned variables to increase participation in irrigation farming and improve the livelihood of rural households

Keywords: : Irrigation, Propensity Score Matching And Stochastic Frontier, Technical Efficiency

Impact of Small-scale Irrigation on Farm Households’ Technical Efficiency: The Case of Girawa District, East Hararghe, Oromia, Ethiopia (Review Completed - Accepted)

This study evaluated the impact of small-scale irrigation on farm households’ technical efficiency of production in Girawa district, East Hararghe, Oromia, Ethiopia. Both primary and secondary data were collected for the study. Primary data were collected from 200 sample respondents drawn from both participant and non-participant households. Econometric models were employed for data analysis. Stochastic production frontier model was used for technical efficiency estimation and Propensity score matching method was applied to analyze the impact of small-scale irrigation on the technical efficiency. The logistic regression was employed to estimate propensity scores. In matching processes, kernel matching with band width of 0.5 was found to be the best matching algorism. This method was also checked for covariate balancing with a standardized bias, t-test, and joint significance level tests. The results revealed that households that participate in irrigation practice have got an improvement of 8.92% in technical efficiency than those households that were not participating in irrigation practice. Results showed that participation in irrigation has a significant, positive and robust impact on the outcome variables. The sensitivity analysis also showed that the impact estimates are insensitive to unobserved selection bias. All results obtained from different models revealed the positive impact of irrigation on farm household technical efficiency. Therefore, policy makers should give due emphasis to the aforementioned variables to increase participation in irrigation farming and improve the livelihood of rural households.

Keywords: : Irrigation, Propensity Score Matching And Stochastic Frontier, Technical Efficiency

Impact of Soil Conservation on Farm Efficiency of Maize Growers in Arsi Negelle, Central Rift Valley of Ethiopia (Review Completed - Accepted)

Ethiopia has failed to produce enough food to feed its population and the country has remained as one of the poorest countries in the world and land degradation has been identified as one of the most serious problems that threaten the sustainability of agriculture in the country. In an effort to address this problem, the government has given due attention for soil and water conservation in the country. However, definitive and quantitative information regarding soil conservation and its interactions with farm productivity is lacking. The major concern of this study was therefore, to evaluate the impact of soil conservation interventions on technical efficiency of smallholder farm households in Arsi Negelle district of Ethiopia using cross sectional data collected from randomly selected 160 sample households during 2011/12 production season. Stochastic frontier has been used to extract the efficiency scores from the production function and to measure the impact of conservation practices on technical efficiency; Propensity Score Matching (PSM) was employed. The logistic regression estimation of factors affecting participation in soil conservation revealed that educational level of the household head, farming experience and frequency of extension contact significantly affected the participation decision of households in soil conservation. In matching processes, kernel matching with band width of 0.5 was found to be the best matching algorism. This method was also checked for covariate balancing with a standardized bias, t-test, and joint significance level tests. The results revealed that households that participate in conservation practice have got an improvement of 3.16 percent in technical efficiency than those households that were not participated which shows participation has a significant, positive and robust impact on the outcome variables. Therefore, policy makers and other stockholders should give due attention in soil conservation.

Keywords: Impact, PSM, Soil Conservation, Stochastic Frontier, Technical Efficiency

An Evaluation of Technical Efficiency Of Commercial Banks In Nigeria (A Dea Approach) (Review Completed - Accepted)

This study evaluated technical efficiency of the Nigerian commercial Bank between the years 2002 to 2011. Ten Nigerian Banks were randomly selected out of 15 banks quoted in Nigeria. Published financial statements of the banks were sourced from which data for our variables were ascertained for 10 years. For this intention, the Data Envelopment Analysis (DEA) model was used with three input variables, which are; (deposits, operating expenses, and assets.) and four output variable; which are (loan and advances, investment, Interest income, and non-interest income). This study adopted the intermediation approach in selecting the inputs and outputs above.

The results of the analysis showed that, some banks were found perfectly technical efficient with efficiency scores of 1.000 meaning (100%) efficiency, whereas those that were below 1.000 were less fully efficient. The mean technical efficiency, for the period examined stood at 0.938 (93.8%). This mean result meant that the Nigerian banking sector generally needs sound managerial attention. It is recommended therefore that the sound macroeconomic, sectorial and structural policies are applied to improve internal balance, ensure external sector performance and stimulate the productivity base and industrial sector of the Nigerian economy

 

Keywords: Data Envelopment Analysis, Decision-Making Units, Financial Intermediation, Technical Efficiency

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