Does agricultural cooperative membership impact technical efficiency of maize production in Nigeria: An analysis correcting for biases from observed and unobserved attributes.

Kehinde Oluseyi Olagunju,Zainab Oyetunde-Usman,Abiodun Olusola Omotayo,Bola Amoke Awotide,Adebayo Isaiah Ogunniyi,Jose M Martínez-Paz

doi:10.1371/journal.pone.0245426

Abstract

The formation of agricultural cooperatives has been widely promoted as an agricultural development policy initiative to help smallholder farmers cope with multiple production and marketing challenges. Using a nationally representative survey dataset of smallholder maize producers from rural Nigeria, this study assesses the impact of agricultural cooperative membership on technical efficiency (TE). We based our estimation approach on the combination of a newly developed sample selection stochastic production frontier model with propensity score matching to control for possible selectivity biases from both observables and unobservables. We estimate stochastic meta-frontiers to examine TE differences between cooperative members and non-members. Our results reveal that TE levels of members are consistently higher than that of non-members. This calls for continued policy incentives targeted at encouraging farmers to form as well as participate in agricultural cooperatives.

Highlights

The majority of rural households in Nigeria depend on agriculture as their main source of income
The present study aims at investigating the impact of agricultural cooperative membership on technical efficiency (TE) of maize production in rural Nigeria
1 if farm is located in North east zone, 0 otherwise 1 if farm is located in North west zone, 0 otherwise 1 if farm is located in North central zone, 0 otherwise 1 if farm is located in South east zone, 0 otherwise 1 if farm is located in South south zone, 0 otherwise 1 if farm is located in South west zone, 0 otherwise

Summary

Introduction

The majority of rural households in Nigeria depend on agriculture as their main source of income. In 2018, agriculture generates approximately 70% of total rural jobs, accounts for more than 85% of rural income streams, and contributes about 25% of the country’s total GDP [1]. The sector is mainly dominated by small scale farmers who face multiple marketing and productivity challenges including limited access to productive inputs, output markets, extension services, credit facilities, and unavailability of improved agricultural technologies. This may lead to a reduction in agricultural incomes as well as constitute threats to the food security of rural households. The continued challenges faced by these farmers spurred several development parastatals, agribusiness companies, governments, and international development

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Conclusion