Measurement of Technical Efficiency and Its Determinants among Maize Farmers in Asante Akyem North Municipality

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Agriculture is the backbone of Ghana’s economy likewise that of Asante Akyem North Municipality. Agricultural productivity varies mainly due to differences in efficiency and production technology. Efficiency measurement has been the concern of most researchers with much focuses on the estimation of technical efficiency levels (scores) and their determinants. Based on empirical studies, policy makers have realised that one important source of growth for the agricultural sector is efficiency gain through greater technical efficiency. This study attempts to measure the level of technical efficiency of maize farmers in Asante Akyem North Municipality by identifying its determinants, estimating the scores and evaluating the importance of the socio-economic variables on technical efficiency. Technical efficiency is defined as the ratio of the observed output to the corresponding frontier output and is estimated from the composed error term. Technical efficiency is estimated using the maximum likelihood and seemingly unrelated estimation methods under the specification of the Cobb Douglas stochastic frontier model with half normal assumption for inefficiency effects. The study used well structured questionnaire to obtain cross-sectional data from 250 maize farmers in the farming areas of the municipality. The results from the study indicate that the mean technical efficiency of maize farmers in the municipality is 73%; implying that actual maize production is in shortfall of 27%. However, efficiency scores range from 17.3% to 95.48%. Analysis of the determinants of technical efficiency indicates that, access to credit and education, hybrid seed, weedicide, male farmers and farm size are positively related to the technical efficiency of maize farmers. Fertilizer application, labour hours, number of seed sowed per hole and farmer’s family size were negatively related to the technical efficiency of farmers. However, all the variables were statistically significant except, fertilizer application and farmer’s family size; which were statistically insignificant at 5% level. Based on these findings, the study recommends the loosening of various constraints associated with credit acquisition, diversification of produce and also the promotion of farmers’ cooperatives to ease the accessibility of credit to farmers. Secondly, redesigning the F-CUBE programme to improve the quality of education and providing informal agricultural education to farmers within the farming areas, will be useful mechanisms to improve efficiency of maize farmers. Additionally, there is the need to train more extension officers, equip and motivate them with adequate facilities and attractive remuneration to enable them deliver. Finally it is recommended that, further studies can be pursued through an extension to cover allocative efficiency, greater geographical area, inclusion of additional variables, increase in sample size and the use of Data Envelopment Analysis.
A thesis submitted to the School of Graduate Studies, Kwame Nkrumah University of Science and Technology in partial fulfilment of the requirement for the award of Master of Philosophy in Economics.