Technical efficiency and its determinants in smallholder rice production in northern Ghana

Agriculture remains a dominant economic sector in many developing countries including Ghana. Agricultural production is however dominated by smallholders who are usually classified as being resource-poor. Ensuring that smallholder farmers make efficient use of scarce resources in their production activities is therefore very important to help raise the level of productivity at the small farm sector. Improving agricultural productivity also requires an understanding of the current productive capacity of farmers given the level of technology as well as the factors affecting their efficiency. The current study was therefore carried out to estimate the technical efficiency of smallholder rice farms in Northern Ghana as well as the determinants of inefficiency using data from a cross-section of 300 smallholder farm households. A multi-stage stratified random sampling approach was used to collect data which was fitted to a stochastic frontier production function incorporating an inefficiency effects model. A quadratic form of the production function was specified to represent the production frontier of rice farms based on a preliminary test of the appropriate functional form. The study revealed that the mean technical efficiency of rice farms was 63.8 percent, indicating that farmers are producing below their maximum potential at the current level of technology. Hence without increasing the current level of input use, producers in the study area can potentially increase their efficiency by 36.2 percent at the current level of technology. Apart from seed, all the conventional inputs were significant in their influence on rice output. The determinants of technical efficiency were gender of the farmer, years of formal education, membership of farmers’ association and specialization in rice production. Male farmers as well as less educated farmers were more efficient in production. Similarly, farmers who belonged to a farmers’ organization as well as producers with higher degree of specialization in rice production were found to be more efficient. Irrigation shifted the production frontier upwards indicating higher productivity with irrigation use. Similarly, farmers who double-cropped their fields and farmers in the Northern Region were located on a higher production frontier. The study recommends the expansion of irrigation access to farmers as well as incentivizing farmer-based organizations to enhance the efficiency of farmers in the study area. Access to irrigation will also facilitate double cropping leading to improved rice production in Northern Ghana. Furthermore, specific factors limiting production efficiency of farmers in the Upper East Region require investigation and remedies to improve the efficiency of farmers in that area.