Allocative efficiency of small-holder cocoyam farmers in Anambra State, Nigeria

Abstract

This study employed a stochastic frontier translog cost and production functions to measure the level of allocative efficiency and it’s determinants in small-holder cocoyam production in Anambra state, Nigeria. A multi-stage random sampling technique was used to select 120 cocoyam farmers in the state in 2005 from whom input-output data and their prices were obtained using the cost-route approach. The parameters of the stochastic frontier cost function were estimated using the maximum likelihood method. The result of the analysis shows that individual farm level allocative efficiency was about 65%. The study found age and education to be negatively and significantly related to allocative efficiency at 1.0%. Farm size coefficient also had a negative relationship with allocative efficiency and was significant at 5.0%. Fertilizer use and credit access was significant and directly related to allocative efficiency at 5.0% as well as farm experience at 10.0% level of probability. No significant relationship was found between allocative efficiency and extension visit, family size and membership of cooperative societies.