Determinants of resource use efficiencies among lowland rice farmers of Enugu State, Nigeria

Abstract

The gap in supply and demand of rice could be due to observable differentials in the allocative efficiency of the rice farmers in Nigeria. Therefore, the study focused on the determinants of resource-use efficiencies and profitability of lowland rice farmers of Enugu State, Nigeria. A multistage sampling technique was used to collect cross-sectional data from 300 smallholder rice farmers across the six agricultural zones of the State. The gross margin (GM) analysis was used to estimate the profitability while the marginal value productmarginal factor cost (MVP-MFC) was used to evaluate the efficiency of rice farming. The Stochastic Frontier Cost Function was also used to estimate the determinants of resource use efficiency among lowland rice farmers in Enugu state. The results from the GM showed that rice production is profitable with an average rate of returns on investment (ROI) of 2.80. The MVP-MFC analysis showed that all the input factors hypothesized were over-utilised indicating the existence of large-scale resource-use inefficiency among lowland rice farmers of the state. Education and age were the only socio-economic variables that affected the allocative efficiency of the rice farmers. The study recommends a farm-level policy directed towards the encouragement of younger adults since they are more likely to adopt innovation and boost efficiency and investment in extension education for advisory services to facilitate resource-use efficiencies.