Resource-Use-Efficiency among Smallholder Groundnut Farmers in Northern Region, Ghana

Abstract

The study analyses the efficiency of resource use by collecting cross-sectional data from 120 groundnut farmers in the Tolon district of the Northern region, Ghana, during 2013 major cropping season. It focuses on identifying the determinants of groundnut output growth, measuring the technical efficiency level of the farmers as well as how efficient farmers are with respect to the allocation of their inputs. The stochastic frontier analysis (SFA) was employed to examine the determinants of output and measure the technical efficiency level of farmers while the marginal value product marginal factor cost (MVP-MFC) approach was used to ascertain whether farmers are efficiently allocating their resources or not. The results from the stochastic frontier analysis indicated that labour and quantity of seeds exerted significant and positive effects on groundnut output whilst the area of land allocated to groundnut cultivation had negative and significant effect on groundnut output. Groundnut farmers in the study area had a mean technical efficiency score of Original Research Article Danso-Abbeam et al.; AJEA, 6(5): 290-304, 2015; Article no.AJEA.2015.087 291 about 84% indicating an output loss of 16% due to inefficiency. Various sources of efficiency include; education, farming experience, household size, membership of farmer-base-organization and farmers contact with extension personnel. Allocatively, farmers were over-utilizing labour and seeds sown while under-utilizing quantities of herbicides. The study therefore recommends that an effective farm level training programmes for rural farmers through an effective extension services could increase farmer’s efficiency level and hence increase their profit level.