TECHNICAL EFFICIENCY IN THE PRODUCTION OF NSUKKA YELLOW PEPPER AMONG RURAL FARMERS IN ENUGU NORTH AGRICULTURAL ZONE, ENUGU STATE, NIGERIA

1 TECHNICAL EFFICIENCY IN THE PRODUCTION OF NSUKKA YELLOW PEPPER AMONG RURAL FARMERS IN ENUGU NORTH AGRICULTURAL ZONE, ENUGU STATE, NIGERIA BY UGWU STANLEY IFEANYI REG NO: PG/MSC/05/40132 A DISSERTATION SUBMITTED TO THE DEPARTMENT OF AGRICULTURAL ECONOMICS IN THE PARTIAL FULLFILMENT OF THE REQUIREMENT FOR THE AWARD OF MASTER OF SCIENCE (M.Sc) DEGREE IN AGRICULTURAL ECONOMICS UNIVERSITY OF NIGERIA, NSUKKA JUNE, 2010 TITLE PAGE TECHNICAL EFFICIENCY IN THE PRODUCTION OF NSUKKA YELLOW PEPPER AMONG RURAL FARMERS IN ENUGU NORTH AGRICULTURAL ZONE, ENUGU STATE, NIGERIA CERTIFICATION This is to certify that this research work is an original work undertaken by UGWU STANLEY IFEANYI , a Postgraduate Student of the Department of Agricultural Economics with registration number, PG/M.Sc/05/40132, and has been prepared in accordance with the regulations governing the preparation of project work in the University of Nigeria, Nsukka - Prof E C Okorji Prof E C Nwagbo Project Supervisor Head of Department -External Examiner DEDICATION This work is dedicated to the Almighty God the all-knowing, most merciful and Alpha and Omega who continues to shower us with unmerited blessings and favour ACKNOWLEDGEMENT Glory, honour and adoration belongs to the almighty God for his love , protection, providence, mercies, life which only he gives My thanks goes to my mother for her immeasurable encouragement and financial support when the going got too tough I also remember Arch Odo Everestus odo and family for their encouragement I cannot forget in a hurry my guy, Agada Alfred (Gadosky) for sacrificing his comfort just for his friend to ‘tag along’ I acknowledge the concerted effort of my supervisor Prof E.C Okorji in thumbing through this work ensuring that it is concluded and rightly I owe him heart felt gratitude Thanks also go to the current Head of Department of Agric Economics University of Nigeria, Nsukka, Prof E.C Nwagbo My gratitude also goes to other Professors in the Department, Prof S A N D Chidebelu, Prof E O Arua, Prof C J Arene, Prof N J Nweze and Prof E C Eboh I have benefited immensely from your vast knowledge Worthy of mentioning are other lecturers in the department namely: Dr (Mrs) A I Achike, Dr F U Agbo, Dr A A Enete, Dr C U Okoye, Dr Ben C Okpukpara, Mr P B I Njepuome, Dr Chukwuone Nnaemeka and other lecturers who have contributed in numerous ways to the development of this work My special thanks go to my dear friends and classmates: Ceejay, Ezea Emma, Ebere, Ojogu, Taofeeq, Charso, Pipi, Mantu Also to my cousin Onyinye who insisted I include her name I acknowledge the scholars whose works I have cited in this thesis Ugwu, S.I TABLE OF CONTENTS Cover Page ………………………………………………………………………………i Certification Page……………………………………………………………………… ii Dedication……………………………………………………………………………… iii Acknowledgement………………………………………………………………….…….iv Abstract………………………………………………………………………………… v List of Tables……………… …………………………………………………………viii Abstract………………………………………………………………………………… ix CHAPTER ONE INTRODUCTION 1.2 Backgroung of the study .1 1.3 Problem Statement 1.4 Objectives of the Study .3 1.5 Hypotheses of the Study .4 1.6 Justification for the Study CHAPTER TWO 2.0 LITERATURE REVIEW 2.1 Agronomy of pepper 2.2 Sustainable Resource Use and food Security .6 2.3 Global Agricultural Resource Use Trend .7 2.4 Agricultural Research and Resource Productivity 2.5 Measures of Efficiency .9 2.5.1 Technical Efficiency 10 2.5.2 Allocative Efficiency 10 2.5.3 Pareto efficiency 11 2.6 Related Studies on Efficiency 11 2.7 Theoretical Framework………… 12 CHAPTER THREE 3.0 METHOLOGY 15 3.1 Study Area 15 3.2 Sampling procedure 15 3.3 Method of data Collection 16 3.4 Data analysis .16 3.5 Model Specification 16 3.5.2 Technical Efficiency Model 17 3.6 Student’s T-test 17 CHAPTER FOUR 4.0 RESULTS AND DISCUSSIONS .19 4.1 Socio-economic Characteristics of the Respondents 19 4.1.1 Gender of the Respondents 19 4.1.2 Age Distribution of the Respondents 20 4.1.3 Marital Status of the Respondents 20 4.1.4 Years of formal Education 21 4.1.5 Family Size of the respondents 22 4.1.6 Major Occupation of the Respondents .22 4.1.7 Farm income level of the Respondents 22 4.1.8 Ownership of Farmland 23 4.2 Forms of Farming systems 23 4.3 Production ofNsukka Yellow Pepper in the Study Area 24 4.4 Land Area Cultivated of Nsukka yellow Pepper by the Respondents………… 25 4.5 Influence of socio-economic charateristics of the Respondents on their technical efficiency .26 4.6 The Efficeincy of Resource use 28 4.7 Distribution of the Technical Efficiency indices of the Respondents 29 CHAPTER FIVE 5.0 SUMMARY, CONCLUSION AND RECOMMENDATION 30 5.1 Summary 30 5.2 Conclusion 31 5.3 Recommendations 32 REFERENCES 33 LIST OF TABLES 4.1.1 Distribution of Respondents According to their Socio-economic Characteristics…………… …………………………………………………… 19 4.2 Frequency Distribution of Respondents According to Forms of farming System………………………………………………………………………… 23 4.5 4.3 Schedule of Farming Activities of Respondents 24 4.4 Distribution of he respondents according to land area cultivated 25 Maximum Likelihood Estimates of inefficiency Parameters using Cobd-Douglas frontier function 26 4.6 Maximum Likelihood Estimates of Stochastic Frontier Production Function of Nsukka Yellow Pepper Production 28 4.7 Distribution of Technical Effiency Indices of the Respodents in the Study Area…………………………………………………………….… 29 10 ABSTRACT This study determines the technical efficiency level and socioeconomic characteristics that influence the technical efficiency of yellow pepper farmers Stochastic Frontier function that incorporated inefficiency factors was estimated using a Maximum Likelihood technique to provide estimates of technical efficiency and its determinants using data obtained from 60 Nsukka Yellow pepper farmers in Nsukka, Enugu State, Nigeria The result shows that the mean technical efficiency was 70 percent indicating the need for improvement in efficiency level for additional 30 percent The result also indicates that the respondents are operating in the rational stage (stage II) of production as indicated by the return to scale of 0.797 The empirical findings also show that age, number of years spent in formal education, family size and farming experience are important socio-economic determinants of the respondents’ level of efficiency Farming experience had positive influence on the respondents’ level of efficiency It was recommended that rural women should be effectively mobilized for full participation in the production of Nsukka yellow pepper through the use of extension agents and community leaders, provision of farm inputs through establishment of channels that will enable farmer access credit facilities and review of land use act to give the rural farmers access to land 40 5.1 Summary This study was conducted to determine the efficiency of use of resources in the production of Nsukka yellow pepper among the rural farmers in Enugu North agricultural zone Researches on the efficiency of utilization of resources by rural farmers in their agricultural enterprises are expected to alleviate the problem of resource allocation in their farm enterprises It is expected that this will improve the standard of living of the rural farmers through maximization of their output, which will translate to enhanced income level and subsequent poverty reduction The study was guided by the following specific objectives: to assess the socio-economic characteristics of yellow pepper farmers in the study area; to assess the production systems employed by the farmers in the production of Nsukka yellow pepper; to determine labour, land and capital use in the production of Nsukka yellow pepper; to estimate the influence of the farmers’ socio-economic characteristics on their technical efficiency of resources used in producing Nsukka yellow pepper Multi-stage random and purposive sampling techniques were adopted in the selection of the respondents Sixty respondents were selected and successfully administered questionnaires Primary data were collected and used The analytical tools used include descriptive statistics, stochastic frontier production function Result showed that the females have complete dominance in the production of Nsukka yellow pepper The farmers of Nsukka yellow pepper are 100% female About 37 percent of respondents were in the age bracket of 31 – 40 years and 53.3% of the respondents were married Majority of the respondents (85%) attained appreciable level of formal education The modal family size was – 10 individuals, which constitutes 48.3% of the respondents Majority of the respondents were artisans, civil servants and traders while 25% of the respondents were full time farmers The modal farm income per cropping season income level of the respondents (33.3%) was N100,001 – N150,000, while 60% of the farmers cultivate on their family lands The average farm size of the respondents was hectares Monocropping is a form farming system employed by 67.7% of the respondents, however 52.5% were engaged in mixed farming Majority of the respondents practiced a form of irrigation but the bulk of production 71.7% was done during rainy season Furthermore the major inputs 41 used by the farmers are: land; labour; manure; fertilizer and seeds of Nsukka yellow pepper The average output of Nsukka yellow pepper is 0.24 tonne per hectare The estimates of influence of socio-economic characteristics of the farmers on their production efficiency show that age, years spent in formal education, family size and experience of the farmers affected the farmers’ technical efficiency significantly The number of years spent in formal education to had positive causality on the farmers’ technical efficiency The estimates of the stochastic frontier production function show that input variables that influenced the output of Nsukka yellow pepper significantly are labour, farm size, and manure The estimates of the stochastic frontier function show labor, farm size, fertilizer, seeds and manure had 0.27, 0.45, 0.05, 0.30 and 0.45 levels of efficiency respectively, indicating the need to increase the use of these various inputs to increase the output of Nsukka yellow pepper The sum of the elasticities of capital inputs (fertilizer, seeds and manure) is 0.79 The distribution of technical efficiency indices of the respondents show that the maximum technical efficiency index is 0.91, the minimum is 0.10 while the mean technical efficiency is 0.70 5.2 Conclusion This study was centered on the estimation technical efficiency of the rural farmers engaged in the production of Nsukka yellow pepper, using the stochastic parametric estimation methods A Cobb-Douglas functional form was employed to estimate the Maximum Likelihood Estimates The study has shown that the rural yellow pepper farmers are women basically because 100% of the respondents were and were also relatively below middle age with most obtaining at least secondary school education Most had family size of between – 10 persons The bulk of the respondents were artisans The distribution of the technical efficiency indices show wide variation in the level of technical efficiency, which indicates low level of technology adopted by some of the respondents It was observed that on the average, the level of technical efficiency is high there is need to improve The results also show that labour, farm size fertilizer, seeds and manure had positive causality on the output The coefficients for fertilizer and seeds had no significant influence on the output There coefficients were 0.27, 0.45, 0.05, 0.30 and 0.45 respectively The farmers’ level of technical efficiency has also been shown to be influenced 42 significantly by age, number of years spent in formal education, family size and farming experience The technical efficiency of the farmers could be increased by 30% 5.3 Recommendations The findings of this study have important policy implications for improving the economic status of the rural dwellers engaged in the production of Nsukka yellow pepper The following are the recommendations arising from the findings of this study: i Effective mobilization of rural women for full participation in the production of Nsukka yellow pepper through the use of extension agents and community leaders The extension agents will disseminate improved farm practices and the adoption of the disseminated information will be easy as most of the farmers are moderately educated ii Creation of enlightenment campaigns that would encourage educated persons to embark on production of Nsukka Yellow pepper iii More capital inputs should be made available through provision of more organic manure to increase the output of Nsukka yellow pepper This could be facilitated through establishment of channels that will enable the farmers, access credit facilities for procurement of the capital inputs and also hiring of labour iv A review of the land use act is needed to give the 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(2005) World Trade Negotiations on Agricultural Proposal By Nigeria February, 2005 Retrieved on September, 2007 from www.org/English/traptop_e/agric/_e Yotopoulos, P.A and L.J (1973)Test for Relative Efficiency Some further results American Economic Review 63;21 49 Department of Agric Economics, University of Nigeria, Nsukka Date -Dear Respondent, Request for Response to Questionnaire I am an M.Sc postgraduate student of the above named department and the University currently undertaking a research work titled “Technical Efficiency in the production of Nsukka Yellow among Rural Farmers in Enugu North Agricultural Zone, Enugu State, Nigeria.” You have been chosen as one of the respondents to supply the required information for this study I therefore solicit for your cooperation to respond as objective as possible to the questions It is pure academic work and all information supplied by you will be strictly treated in confidence Thank you for your patient and cooperation Yours faithfully, Ugwu Stanley I Questionnaire/ Interview Schedule A Location Local Government Area……………………………………………… Village /Town…………………………………………………………… B Socio-economic Characteristics of the Nsukka yellow pepper farmers Gender: Male Female Age in years…………………………………………………………………… Marital Status: Single Married Widow Divorced Level of Education: i Never attended school ii Attended primary school iii Attended secondary school iv Attended any higher institution How many years did you totally spend in school………………………… 50 Number of people in your household…………………………… For how many years have been involved in the production of Nsukka Yellow pepper? ………………… What is your major occupation? Artisan Civil service Farming Trading How many hours on the average could you say you spend on the farm per day? 10 What is the farm size devoted to yellow pepper production? ……………………… 11 Who owns the farm you use? Family Community On lease 12 Please tick the appropriately the range of your farm income N200,000.00 13 What forms of farming system you employ? Please tick correctly i Multiple cropping Yes No ii Mixed farming Yes No iii Irrigation Yes No iv Intensity of production All year round Rainy season only v Others, specify…………………………………… 51 OPERATION INPUT Jan Feb Mar Aprl May Jun Jul Aug Sep Oct Nov Dec Nursery land Clearing/Tillage Bed making Transplanting Weeding Fertilizer Application/ Manuring Harvesting 14 What period of the year did you carry out the following operations and indicate the inputs used Please tick accordingly 52 PRODUCTION VARIABLES 15 Please provide the following information about your farm for the last cropping season for Nsukka yellow pepper LABOUR Source of labour Family Hired Hired and Family Exchange Others please specify 53 16 Please provide the following information about your farm for the last cropping season for Nsukka yellow pepper Exchange labour Family labour ( mandays) Hired labour (mandays) ( mandays) Male Female Male Female Male Female (Adult) (Adult) Child (Adult) (Adult) Child (Adult) (Adult) Child Activity Land clearing Tillage Ridging Weeding (1) (2) (3) Fertilizer (1) (2) (3) Harvesting 17 Please also provide us the information on the following inputs used during the last cropping season and corresponding output INPUT Quantity (Kg) Fertilizer Manure Yellow pepper Seeds Agrochemical: Herbicide Pesticide (1) (2) ... capital input in the production of Nsukka yellow pepper 39 Furthermore, in determining the efficiency of use of different inputs in the production of Nsukka yellow pepper by the selected rural farmers, ... determine the efficiency of use of resources in the production of Nsukka yellow pepper among the rural farmers in Enugu North agricultural zone Researches on the efficiency of utilization of resources... 1.3 Objectives of the Study The general objective of the study is to determine the efficiency of resource use in the production of yellow pepper among rural farmers in Nsukka area The specific