PROFIT EFFICIENCY OF SMALLHOLDER MAIZE FARMERS IN SAGNARIGU MUNICIPAL OF NORTHERN GHANA

Abstract

Research background: Maize is the most important cereal crop produced by most households in Ghana for income and household food security. Despite its economic importance, not much study has been carried out on maize profit efficiency in Ghana, hence this study. Purpose of the article: This study estimated profit efficiency of maize farmers in the Sagnarigu municipal of Ghana to understand producers’ profit efficiency level and its determinants as well as the challenges faced by maize producers. Methods: Data was sourced from small-scale maize producers while stochastic frontier analysis was applied to estimate a Cobb-Douglas profit function that simultaneously identified the sources of inefficiency. Kendall’s coefficient of concordance was used to analyse the constraints facing maize producers. Findings & Value added: The findings indicated that maize farmers produced at 71% profit efficiency. This is one of very few studies on profit efficiency of Ghanaian maize farmers. The result means that 29% of the achievable maximum profit was forfeited as a result of production inefficiency. Educational attainment and access to agricultural extension service decreased the level of profit inefficiency while age, herd ownership and membership of farmer organization increased profit inefficiency level of farmers. The most critical challenges reported by farmers were financial constraints, high cost of ploughing and difficulty in acquiring chemical fertilizer. The study recommends that access to agricultural extension service should be improved to cover more farmers while efforts should be made to expand educational access in rural areas to enhance the profit efficiency of farmers.