Technical Efficiency and Technology Gap Ratio in Cocoa Production in Nigeria: A Stochastic Metafrontier-Tobit (Sm-Tobit) Approach

Abstract

The study analysed the technical efficiency and technology gap ratio in cocoa production in Nigeria. A multistage sampling technique was used to select 390 cocoa farmers from three zones where cocoa is commercially grown in Nigeria. Separate stochastic frontier models were estimated for farmers in Kwara, Edo and Ondo States, along with a metafrontier model to obtain alternative estimates for the technical efficiencies of farmers in the different states. Subsequently, a Tobit model was used to access the factors influencing cocoa production in the study area. Results revealed that, the average technical efficiency level was 0.685 for the pooled sample, 0.506, 0.837 and 0.713 for Kwara, Edo and Ondo States respectively, suggesting that there is substantial scope to improve cocoa production in Nigeria. The mean MTR values of 0.506, 0.837 and 0.712 for Kwara, Edo and Ondo States respectively, implied that Edo State was more technically efficient than other states in the study area.  The mean technology gap ratio (TGR) value of 84.3% indicated that, on the average, the cocoa farmers in the study areas would have to close a gap of about 15.7% in order for them to be technically efficient. The study recommended that cocoa farmers in Edo and Ondo States could improve their technical efficiency through a better management using the available technologies and resources while intervention to raise technology that will help close the gap between the regional frontier curve and the global frontier curve through raising and distributing disease resistant and high yielding cocoa seedlings to the farmers should be adopted in Kwara State.