Abstract
The gap in supply and demand of rice could be due to observable differentials in the allocative efficiency of the rice farmers in Nigeria. Therefore, the study focused on the determinants of resource-use efficiencies and profitability of lowland rice farmers of Enugu State, Nigeria. A multistage sampling technique was used to collect cross-sectional data from 300 smallholder rice farmers across the six agricultural zones of the State. The gross margin (GM) analysis was used to estimate the profitability while the marginal value productmarginal factor cost (MVP-MFC) was used to evaluate the efficiency of rice farming. The Stochastic Frontier Cost Function was also used to estimate the determinants of resource use efficiency among lowland rice farmers in Enugu state. The results from the GM showed that rice production is profitable with an average rate of returns on investment (ROI) of 2.80. The MVP-MFC analysis showed that all the input factors hypothesized were over-utilised indicating the existence of large-scale resource-use inefficiency among lowland rice farmers of the state. Education and age were the only socio-economic variables that affected the allocative efficiency of the rice farmers. The study recommends a farm-level policy directed towards the encouragement of younger adults since they are more likely to adopt innovation and boost efficiency and investment in extension education for advisory services to facilitate resource-use efficiencies.
Highlights
The importance of agriculture to Nigeria's overall development cannot be overstated
The average age of the sampled respondents was 45 years old, according to the results. This indicates that the bulk of the responders were still youthful, energetic, and productive, which is advantageous for Nigeria's labour-intensive agriculture
The results from the gross margin (GM) show that rice production is profitable with an average rate of returns on investment (ROI) of 2.80
Summary
The importance of agriculture to Nigeria's overall development cannot be overstated. In recent years, the agricultural industry, which employs the majority of the workforce, has made a considerable contribution to Nigeria's Gross Domestic Product (GDP). The sector remains critical to the country's overall economic growth and development. Agriculture generated 21.2% of the nation's GDP in 2018, compared to 25.7% and 52.01% from industry and service sectors, respectively (NBS, 2019). Most agriculture yields in Nigeria are below their potential yields, according to the empirical literature. The low yield might be linked to inefficient agro-input management, as well as the impact of socio-economic issues, policy and institutional barriers, and poorly managed extension services on resource-use efficiencies. The empirical literature suggests that agricultural productivity is generally poor as a result of inadequate and irregular use of fertilizers which is estimated at 107 kg ha–1 among rice farmers in Abuja, Nigeria (Ajah and Ajah, 2014; Opata et al, 2019; Uche et al, 2021). There is a need for this study on the drivers of resource use efficiency to demonstrate empirically the primary variables influencing yield differentials
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