Relative profit efficiency of Anchor Borrowers Programme (ABP) beneficiary and non-beneficiary rice farmers in Kebbi State, Nigeria

Abstract

Profit efficiency refers to the extent at which a firm makes not only profit but its ability to maximize profit. A comparative analysis was conducted to evaluate the profit efficiency of Anchor Borrowers Programme (ABP) beneficiary and non-beneficiary rice farmers in Kebbi State, Nigeria. Multistage sampling technique was used to select 499 ABP beneficiary and non-beneficiary rice farmers each giving a sample size of 998. A well-structured questionnaires were administered in order to collect data. Data collected were analyzed using Stochastic Frontier Profit Function Model. The results revealed that farm efficiency index varied from one farmer to another and ranged from 0.44 to 0.99, with a mean of 0.94 for the beneficiary farmers, while for non-beneficiary farmers, the maximum efficiency was 0.90 with 0.11 minimum efficiency and a mean of 0.74 The results revealed that the two categories of farmers were not efficient in maximizing profit, however, ABP beneficiary rice farmers were more profit efficient than the non-beneficiary rice farmers. This suggests that ABP has improved the profit efficiency of the beneficiary rice farmers. It is recommended that since ABP enhances the profit efficiency of the beneficiary rice farmers, policies should be tailored towards inclusion of other farmers to benefit from ABP intervention in Nigeria. Key words: Profit efficiency, Anchor Borrowers Programme (ABP), beneficiary rice farmers.