DETERMINANTS OF TECHNICAL EFFICIENCY AND PROFITABILITY OF ANCHOR BORROWER MAIZE FARMERS IN GOMBE STATE, NIGERIA

Abstract

The study assessed the impact of anchor borrowers program on crop production in Gombe State, Nigeria. A total of 150 beneficiary farmers were sampled across the State and questionnaire were administered via scheduled interview using multi-stage, cluster, purposive and simple random sampling methods. The data collected were analyzed using stochastic frontier production function and gross margin analysis. The result on the socioeconomic characteristics revealed that most of the respondents were male (80.67%), married (79.33%) and experienced maize farmers (76.00%). The respondents were technically efficient with a mean level of 72.00% and sum of the elasticity estimates was found to be 2.1625 indicating increasing return to scale, the inefficiency parameters conformed to the a priori expectation having carried the expected negative signs. Sigma squared (σ2) was statistically significant at p <0.001. Gamma (γ) was found to be 0.89 and was significant at p <0.001. The study further revealed that maize farming in the area was profitable with a gross margin of ₦87,010.34/ha. The total revenue recorded was ₦267,543.12/ha, while the total variable costs was ₦180,532.78/ha over a total land area of 981.3ha. Profitability index was 0.33 and return on investment was 0.48. There was a moderate availability and accessibility to credit and inputs. Major constraints encountered include; untimely access to loan, bad road network, high cost of fertilizer and labor. It can therefore, be deduced that the program had triggered more farmers into production, even though their technical efficiency was below optimum likely owing to constraints associated with; access to credit and input, and also poor access to extension services. It was recommended that an effective extension service be put in place. Inputs and credit should be disbursed timely and monitoring mechanism should also be improved so as to reduce the tendencies of misappropriating resources meant for maize production to other personal needs.