Stochastic Frontier Analysis of Technical Efficiency and Profitability of Dry Season OKRA Production in Nigeria

Abstract

Food production in Nigeria is almost entirely rain fed despite the great potential of irrigation in Nigeria to boost agricultural productivity. The study assessed the profitability and efficiency of dry season irrigated okra farming in Adamawa State using primary data collected from 180 farmers through a simple random sampling technique. Profit efficiency and stochastic frontier function were used in analyzing the data. The result revealed that labor costs accounted for 48% of average variable cost while a farmer’s total revenue from irrigated okra produce was ₦228,642.56K ($408.2), total fixed cost and variable input cost was ₦102,440.37K ($182.93), resulting in a net farm income (NFI) of ₦126,201.63K ($225.36). The coefficients of farm size, household size, and fertilizer were positive and significant at the 1%, 10%, and 5% levels of probability, respectively, as revealed by the OLS results. Empirical estimate shows that the mean technical efficiency value of vegetable farmers was about 0.73 while Technical inefficiency coefficient of farming experience (−0.420), adjusted household size (−0.193), and extension contacts (−0.162) are variables that increased technical efficiency. Lack of access to water, high cost of equipment, and inadequate finance were identified as lead constraints of the okra farmers. Therefore, recommendations by the study are that farmers be encouraged to establish cooperative organizations so that they can pool their resources to create an irrigation system that is affordable. Also, sustainability of small scale irrigation scheme should be promoted by the government through skill enhanced trainings.