Determinants of Profit Efficiency Among Small Scale Rice Farmers in Nigeria: A Profit Function Approach

Abstract

This study employs a stochastic frontier approach to examine profit efficiency of small scale rice farmers in Nigeria using farm-level survey data collected from 200 farmers in the study area. Data were analysed using descriptive statistics and standard profit function. The result shows that about 60 percent of potential profit is gain due to production efficiency while the remaining can be attributed to both technical and allocative inefficiencies in the study area. Also, the result further revealed that age, educational level, farming experience and household size positively affected profit efficiency. These variables are thus important in policy formulation by government.