Stochastic Frontier Analysis of Hot Pepper Production among Small-Scale Farmers in Dutsin-Ma Local Government Area of Katsina State, Nigeria

Abstract

This study used the Stochastic Frontier model to analyze hot pepper production among small-scale farmers in Dutsin-ma Local Government Area, Katsina State. Purposive and proportionate random sampling techniques were used to select 121 hot pepper farmers from whom the data was collected using a structured questionnaire. The data was analyzed using descriptive statistics, gross margin analysis, and stochastic frontier production function model. The result of the study shows that hot pepper production activity is dominated by male (99.2%) and married (95.0%) farmers whom are middle aged (Mean = 39 year) and most of them (about 53%) have household size of 1-10 persons, and an average farming experience of 13 years with a farm size average of 1.5 hectares. Majority of the hot pepper producers are engaged in its production for income generation while only few among them have access to credits. The result of the gross margin analysis (GM) shows that hot pepper farmers incurred total variable cost (TVC) of NGN138,703.6, and a return of NGN164,513.4 that yielded the profit of NGN25,809.8 per hectare of production and a return on investment of 1.28. The average technical efficiency (TE) of the farmers was found to be 80% among hot pepper farmers in the study area. Moreover the result of the frontier analysis shows that seed, labor and fertilizer are significant inputs determining hot pepper output. In addition to that inefficiency components of the frontier analysis revealed education, access to extension service, cooperative membership, Years of farming experience, farm size, and household size to be the significant determinants of efficiency of hot pepper production in the study area. The result also revealed that farmers in the study area are faced with major challenges of high costs of production inputs and problems of pests and diseases.