Technical efficients of rice production

download Technical efficients of rice production

of 53

Transcript of Technical efficients of rice production

  • 8/16/2019 Technical efficients of rice production

    1/53

    Group 9 Page i

    DECLARATION

    Candidate declaration

    We, the under listed, declare that this dissertation is our original work which has not been

     presented for any another degree in this university or elsewhere, and that all citations in the work

    have been duly acknowledged. The study was undertaken in accordance with the guidelines and

     procedure of the Faculty of Integrated Development Studies.

     NAME OF STUDENTS ID NUMBERS SIGNATURE

    ABDUL-AZIZ KHALID IDS/8087/10 ……………… 

    AMOYAW PORTIA IDS/8284/10 ……………… 

    ASARE-BOATENG MAXWELL IDS/8366/10 ……………… 

    FRIMPONG FORDJOUR FESTUS IDS/8606/10 ……………… 

    SALAM SAFIANU AKUDUGU IDS/8989/10 ……………… 

    SUPERVISOR: Mr. Paul Bata Domanban

    SIGNATURE:………………………….. 

    DATE:………………………………….. 

  • 8/16/2019 Technical efficients of rice production

    2/53

    Group 9 Page ii

    DEDICATION

    This piece of work is dedicated to the families of all group members (authors of this dissertation)

    for their kind support, long suffering, and cooperation in our education.

  • 8/16/2019 Technical efficients of rice production

    3/53

    Group 9 Page iii

    ACKNOWLEDGEMENT

    We are most grateful to the Almighty God for the providence and unprecedented guidance. Had

    it not been for His mercies we would not have been able to complete this study.This dissertation

    could not have been written without the hard work, wonderful cooperation, moral support, and

    routine participation of all members of Group 9 of the 2013/2014 academic year, DEED.

    Worth mentioning is the selfless and effective role played by our supervisor, Mr. Paul Bata

    Domanban, whose help to us exceeded the responsibility as an academic supervisor.

    We are also much grateful to Mr. Benjamin Musah Abu for his unfailing assistance, coaching,

    and motivation throughout the work. Our work was almost impossible without you; we say God

     bless you and your family.

    Also to all lecturers of the University for Development Studies (UDS)-Wa campus especially

    those in the Faculty of Integrated Development Studies, we say a big thank you for the

    knowledge imparted on us throughout the four years of studies.

    Our gratitude also goes to all rice farmers in the Wa West district for giving us the information

    required during interviews granted with them. Finally, we express a profound gratitude to our

    families and all those who contributed in a way or the other to make this work a success.

  • 8/16/2019 Technical efficients of rice production

    4/53

    Group 9 Page iv

    ABSTRACT

    Agricultural production determines the efficiency level of households in their farming activities.

    Rice farmers in the Wa West district do not use all potential technological resources, thus

    making inefficient decisions in their agricultural activities. The key objective of this study is to

    estimate the level of technical efficiency of rice production in the Wa West district using the

    Stochastic Frontier Approach. The study also attempts to determine the returns to scale as well as

    determinants of rice production.

    Data was collected from a sample of 200 respondents. Using random sampling approach,

    structured questionnaires were used to collect primary data on age, sex, household size, ethnicity,

    experience in rice farming, access to credit, and extension contact among others.

    The results indicate that, mean technical efficiency is 0.40, implying that the realized output can

     be increased by 60% even without any additional resources. Land, seed, and fertilizer, are

    significantly positive, indicating that they impact positively on rice farming in the Wa West

    district. The study shows rice farming exhibit increasing return to scale. The combined effects of

    factors involved in the technical inefficiency model are responsible in explaining the level and

    variations in the production of rice farming. The study recommends the periodic visits of agric

    extension officers to aid farmers to increase rice production. Also, Ministry of Food and

    Agriculture should help to improve the technical efficiency of rice farmers through training,

    seminars etc. in order to increase output.

  • 8/16/2019 Technical efficients of rice production

    5/53

    Group 9 Page v

    TABLE OF CONTENTS 

    DECLARATION .................................................................................................... i 

    DEDICATION....................................................................................................... ii 

    ACKNOWLEDGEMENT .................................................................................... iii 

    ABSTRACT ......................................................................................................... iv 

    LIST OF TABLES ............................................................................................... vii 

    LIST OF FIGURES ............................................................................................ viii 

    LIST OF ACRONYMS ........................................................................................ ix 

    CHAPTER ONE .................................................................................................... 1 

    INTRODUCTION ................................................................................................. 1 

    1.1 Background of the Study .................................................................................. 1 

    1.2 Problem Statement ........................................................................................... 4 

    1.3 Objectives of the Study .................................................................................... 5 

    1.4 Justification of the Study .................................................................................. 6 

    1.5 Methodology .................................................................................................... 6 

    1.5.1 Introduction................................................................................................... 6 

    1.5.2 Data Collection Approach ............................................................................. 7 

    1.5.3 Data Presentation .......................................................................................... 8 

    1.5.4 Conceptual framework .................................................................................. 8 

    Theoretical framework and Estimation Procedure .................................................. 9 

    1.6 Scope of the Study ..........................................................................................14 

    1.7 Organisation of the study ................................................................................14 

    CHAPTER TWO ..................................................................................................15 

    PROFILE OF WA WEST DISTRICT ..................................................................15 

    2.1 Introduction ....................................................................................................15 

    2.2 Physical Characteristics ..................................................................................15 

    2.3 Demographic Characteristics ..........................................................................18 

    2.4 District Economy ............................................................................................19 

  • 8/16/2019 Technical efficients of rice production

    6/53

    Group 9 Page vi

    CHAPTER THREE ..............................................................................................22 

    LITERATURE REVIEW .....................................................................................22 

    3.1 Introduction ....................................................................................................22 

    3.1 Importance and uses of rice .............................................................................22 

    3.2 Production Potential and National Rice Policies and Development Strategies .22 

    3.3 Other Studies on Determinants and Technical Efficiency of Rice Farm ..........23 

    CHAPTER FOUR ................................................................................................26 

    DISCUSSION OF RESULTS ...............................................................................26 

    4.1 Introduction ....................................................................................................26 

    4.2 Socio-Demographic Characteristics ................................................................26 

    4.3 Determinants of Rice Productivity ..................................................................27 

    4.4 Level of Technical Efficiency .........................................................................30 

    4. 5 Returns to Scale of Rice Production ...............................................................31  

    4.6 Determinants of Technical Efficiency .............................................................32 

    CHAPTER FIVE ..................................................................................................34 

    SUMMARY, CONCLUSIONS AND RECOMMENDATION.............................34 

    5.1 Introduction ....................................................................................................34 

    5.2 Summary of Major Findings ...........................................................................34 

    5.2 Conclusion ......................................................................................................35 

    5.3 Recommendation ............................................................................................36 

    5.4 Limitations of the Study ..................................................................................37 

    5.5 Suggestions for Future Search .........................................................................37 

    REFERENCES .....................................................................................................38 

    APPENDICES ......................................................................................................41 

  • 8/16/2019 Technical efficients of rice production

    7/53

    Group 9 Page vii

    LIST OF TABLES

    Table 1.1: Variable Name and Units of Measurement…………………………………………..12 

    Table 1.2: Variable Name and Units of Measurement..................................................................12

    Table 4.2: Demographic Characteristics Surveyed Rice Farmers ……………………….….26-27

    Table 4.6: Stochastic Frontier Translog Estimates ……………………………………………...28

    Table 4.6: Elasticity of Significant Level output………………………………….......................31

    Table 4.9: Technical Inefficiency Model Estimates…………………..........................................30

  • 8/16/2019 Technical efficients of rice production

    8/53

    Group 9 Page viii

    LIST OF FIGURES

    Figure.1.1: Conceptual Framework………….…….……………………………………………..8 

    Figure 4.2: Technical Efficiency Chart…....................................................................................30

  • 8/16/2019 Technical efficients of rice production

    9/53

    Group 9 Page ix

    LIST OF ACRONYMS

    ACDEP Association of Church-based Development

    Age Age of respondent

    AGRA Alliance for Green Revolution in Africa

    BOP Balance of Payment

    C_D Cobb Douglas

    CEO Chief Executive Officer

    COLS Corrected Ordinary Least Squares

    Cov. Covariance

    CRT Availability of credit

    CSIR Council for Scientific and Industrial Research

    DEED Department of Economics and Entrepreneurship Development

    EDU years in education

    EFF Experience of farmer

    EXT Extension office

    FAO Food and Agricultural Organization

    FE Fertilizer input

    FIDS Faculty of Integrated Development Studies

    GRIB Ghana Rice Inter-professional Body

    HH Household size

    IR Inland Revenue

    ISSER Institute Of Statistical Social And Economic Research

    LB Labour

  • 8/16/2019 Technical efficients of rice production

    10/53

    Group 9 Page x

    LD Land (farm size)

    LDCs Less Developed Countries

    Ln Natural Log

    MLE Maximum Likelihood Estimates

    MoFA Ministry of Food and Agriculture

    Mt Metric tons

    Mt/Ha Metric Ton per Hectare

     NGOs Non-governmental Organizations

     NRDS National Rice Development Strategy

     NPHC National Pan-Hellenic Council

    OLS Ordinary Least Square

    Sex Sex of respondent

    SFA Stochastic Frontier Analysis

    SHP Soil Health Program

    SRID Statistics Research and Information Directorate

    SS Quantity of seedling

    TE Technical Efficiency

    TICAD Tokyo International Conference on African Development

    UDS University for Development Studies

    UN United Nations

    US United States

  • 8/16/2019 Technical efficients of rice production

    11/53

    Group 9 Page xi

    USAID United States Agency for International Development

    USDA U.S. Department of Agriculture

    USID US agency for International Development

    UWR Upper West Region

    WARDA West Africa Rice Development Association

    WWDA Wa West District Assembly

  • 8/16/2019 Technical efficients of rice production

    12/53

    Group 9 Page 1

    CHAPTER ONE

    INTRODUCTION

    1.1 Background of the Study

    Rice has become a major staple in Ghana in recent times although the crop has been cultivated

    for several years. It is an important food for both rural and urban dwellers, and is gradually

    taking over from traditional, mainly root and cereal crops, staples (Quaye et al., 2000).

    Consumption of milled rice in Ghana went up from below 100,000 Mt to over 600,000Mt

     between 1985 and 2003 (Tomlin et al., 2005). Ghana has great potential to expand its present

    average rice production area of 89700ha by 200% if its vast area of inland valleys and swamps is

    fully exploited (Obeng, 1994). The greatest potential lies in the Interior Savannah zone which

    covers almost the whole of the northern half of the country and can only attained through

     positive transformation of the sector, including increased availability and use of improved

    technologies (Ampofo, 1990). The agricultural sector has benefited from myriad interventions

    that seek to improve yield, reduce poverty and increase incomes (ISSER, 2008). Farmers

    (including rice producers) have benefited from the dissemination of high-yielding crop varieties

    in addition to other complementary technologies (Al-hassan et al., 2004).

    Reflecting on the growing importance of agriculture and the rice sector in particular, the Ghana

    Rice Inter-professional Body (GRIB) organized the first-ever national rice festival in November

    2013. This was aimed at supporting the local rice industry and highlighting the importance of the

    rice sector in ensuring food security, reducing poverty, and creating employment in the country.

    However, the country’s rice self -sufficiency ratio is only about 30% as of December 2012

  • 8/16/2019 Technical efficients of rice production

    13/53

    Group 9 Page 2

    leaving a 70% shortfall. Currently Ghana spends about US$450 million every year on rice

    imports to meet its local demand. About 70% of rice is purchased from abroad given the report

     by the US Department of Agriculture. According to Leticia (2013), Ghana can produce around

    275,000 tons of rice compared to an estimated 600,000 tons that it will purchase from

    international sources.

    Ghana emerged as a significant rice importer in the mid 1980s coincided with the liberalization

    of its economy under the programmes for economic recovery and structural adjustment of those

    years. Prior to and following independence in 1957, Ghana had pursued a policy of food self

    sufficiency, under which high tariff barriers and import restrictions protected indigenous rice

     production, but over the 1995 – 2005 period total rice production has not been stable. From

    202,000 tonnes in 1995 the rice output reduced to 142,000 tonnes after nine years. Rice output in

    Ghana is also low compared with countries like Vietnam, Thailand and China. Whereas Ghana’s

    rice output stood at only 142,000 tonnes in 2005, Vietnam produced as much as 32 million

    tonnes of rice in the same year which was as result of advanced technology. Vietnam’s rice

    cultivation has been rising at an average of 700,000 tonnes per year in the past five years (FAO,

    2006). Despite the downward trend in rice output, the Ministry of Food and Agriculture (MoFA,

    2005) indicated that the consumption of rice over the last decade almost doubled.

    The Upper West region harvest rice in the October, deplete stock in the month of June and the

    households are normally in rice insecurity in the month of May (MoFA, 2006). According to

    MoFA (2009), a total of 1,303 farmers cultivated 2754.9 acres of rice in addition to maize under

    the Expanded Crop Production Programmed (ECPP). The average yield for rice in the various

  • 8/16/2019 Technical efficients of rice production

    14/53

    Group 9 Page 3

    districts of Upper West Region as at 2010 was very minimal. The data revealed that Wa West

    district recorded 2.20, Wa East 2.08, Wa municipality 1.40, Lawra 1.60, Sissala East 2.08,

    Sissala West 2.10, Jirapa-Lambussie 1.35 and Nadowli 1.66 metric tons per hector (SRID, 2011).

    Although local rice production has increase in quality and quantity due to calculated government

    interventions much can be done. The Wa West district is remotely located in the western part of

    the region. Although 90% of the population is subsistence farmers, a major problem is seasonal

    migration during the long period of dry seasons –  most natives migrate to southern part of Ghana

    to undertake jobs. This has as turning effects on the level of agricultural productivity within the

    district. According to the 2010 Annual Crop Survey by RADU on production of selected crops,

    rice is produced on 7180 acres of land and an annual output of 7100 metric tons. There have

     been considerable contributions from government and NGOs towards increasing rice

     productivity within the Upper West Region. Projects such as; Rice Sector Support Project (2009-

    2013), West Africa Agriculture Productivity Project(2011- to date), Emergency Rice Initiative

    Project(2005-2010) - all providing capacity building to rice farmers as well as ACDEP (2010 - to

    date) -provide credit facilities to farmers.

    On the production side growth and development of rice production have become completely

    dependent on yield improvements in the district. To meet local demand, rice production can be

    increased either by increasing rice growing area or by improving the efficiency of existing

    resources allocated to rice production. Yield improvement is governed mainly in two ways;

    either shifting the yield frontier or by developing and promoting yield-enhancing technologies.

    Improving rice productivity can contribute to higher yield and in reducing poverty especially in

  • 8/16/2019 Technical efficients of rice production

    15/53

    Group 9 Page 4

    rural areas; increased productivity may also help in increasing the income and food security of

    small farmers, who depend on rice.

    1.2 Problem Statement

    Rice is an important food crop in the Upper West Region of Ghana and its consumption is

    growing, particularly among urban dwellers. The importance of rice in the region’s economy is

    also seen in its contribution to agricultural GDP and employment. Therefore, as the region and

    Ghana as a whole struggle to achieve accelerated growth in food production, increasing the

    output of rice has become an important goal. The strategic nature of rice has long drawn the

    attention of policy makers who view promoting domestic rice production as a means of reducing

    dependency on imports, lowering the pressure on foreign currency reserves, ensuring stable and

    low-priced sources of food for people, generating employment and income for rice growers

    (Randolph, 1995). Fluctuation in domestic rice production has a direct impact on food security,

    especially for the poorest people of Philippines (Koide et al., 2012).

    However, the ability of rice farmers in the Wa West district to adopt new agricultural

    technologies is affected by farmer and farm characteristics. Examples of such characteristics

    include age, household size of rice farmers, level of education, number of years of schooling,

    total land area used for rice production, and experience in rice farming. Other characteristics are

    extension visits and benefit of credit facility. Over 70% of the rice farmers in the region are

    illiterate (regional assembly, 2009). High illiteracy rates affect farmers’ ability to adopt new

    agricultural practices and to effectively mobilize and apply production inputs. Rice farmers also

    face high input costs (fertilizer, pesticides and machine power) and they lack incentives because

  • 8/16/2019 Technical efficients of rice production

    16/53

  • 8/16/2019 Technical efficients of rice production

    17/53

    Group 9 Page 6

    4.  To estimate the magnitude and effects of factors influencing technical efficiency of rice

     production.

    1.4 Justification of the Study

    One of the major factors that affect the increasing government balance of payment (BOP) deficit

    is increase in rice importation. The study seeks to determine the factors which affect the

    decreased rice productivity and the technical efficiency of rice farmers in the region. Findings

    from this study will aid policy makers in formulating right policies that will help increase

    domestic rice production, thereby reducing government BOP, as well as increase food security.

    According to SRID (2011), Wa West district is the major producers of rice within the region.

    The study area was chosen due to the easy accessibility to data. Also as a major producer, there

    is the potential to increase annual yield if the right strategies are implemented.

    1.5 Methodology

    1.5.1 Introduction

    This section of the chapter looks at the data collection approach, data presentation, theoretical

    framework and estimation procedure.

  • 8/16/2019 Technical efficients of rice production

    18/53

    Group 9 Page 7

    1.5.2 Data Collection Approach

    Sources of Data

    To carry out this research, the study made use of primary data. Cross-sectional data was

    collected from 200 rice farmers using structured questionnaires to ascertain relevant information

    on factors affecting rice production in the district. Data collected were on age, gender,

    educational background, household size, experience of farmer, land size, labour, fertilizer

    application, total rice output and land tenure system used in the district. Data was collected in the

    Wa West district of the Upper West region. The district was chosen because, in Appendix A2,

    the district is the highest with a total output of 2.20 metric tons per hectare out of the region’s

    total output of 14.47 metric tons per hectare.

    Sample Size and Sampling Approach

    A sample size of 200 was used to represent the district. This was used because it is statistically

    large for a generalization and due to logistics constraints such as time, etc. The probability

    sampling approach was used in this study; specifically the simple random technique was used to

    draw respondents. In the words of Miles and Huberman as presented by Punch (2004), “You

    cannot study everyone everywhere doing everything.” To attain 200 respondents out of the 208

    communities in the district, cluster sampling was used to group these communities into five

    zones –  via Wa West District Health centre to ensure representativeness of the population. Out of

    the five zones, two communities were purposively selected from each. With 10 communities as

    the sample frame, 200 rice farmers were administered questionnaires.

  • 8/16/2019 Technical efficients of rice production

    19/53

    Group 9 Page 8

    1.5.3 Data Presentation

    The Frontier software was used, the results was presented in tables and chart. A stochastic

    frontier approach was used to estimate the level of efficiency and determinants of rice

     production.

    1.5.4 Conceptual framework

    Figure 1.1 shows the conceptual framework of the study that link variable to the specific

    objective.

    Figure 1.1: Conceptual Framework

    Efficient Production

    Farmer Characteristics Institutional Characteristics Other Characteristics

    e. g. Age, Sex, e. g. Credit, Training, e. g. Policy

    Education, Experience, Extension contact

    Household size.

    Inefficient Production

    Rice Yield(Output)

    Inputs

    e.g. land, labour, seed, fertilizer

  • 8/16/2019 Technical efficients of rice production

    20/53

    Group 9 Page 9

    In figure 1.1, inputs such as land, labour, seed, and fertilizer determine output levels. Output

    level tells whether rice production is efficient or inefficient given farmer characteristics (such as

    age, sex), institutional characteristics (such as credit, training) as well as other characteristics

    (such as policy).

    Theoretical framework and Estimation Procedure

    For a long time, econometricians have estimated average production functions. It is only after the

     pioneering work of Farrell (1957) that serious considerations have been given to the possibility

    of estimating the so-called frontier production functions in an effort to bridge the gap between

    theory and empirical work (Aigner et al, 1977). The importance of efficiency as a means of

    fostering production has being recognized by many researchers. Efficiency is the extent to which

    time, effort and cost is well used for the intended purpose. There are three major types of

    efficiency –  Technical Efficiency, Allocative, and Economic Efficiency. Allocative Efficiency is

    the ability of a farmer to use resources optimally given their respective prices whiles Technical

    Efficiency is the ability of a farmer to produce the maximum output from a given set of inputs.

    The multiplicative effect allocative and technical efficiency is what is referred to as economic

    efficiency.

    Empirically, technical efficiency is measured using parametric and non parametric approaches.

     Non-parametric approach involves the use of simple mathematical calculations but is limited by

    its inability to specify production function and does not account for the noise or stochastic error.

    Due to these limitations the study employed the parametric approach. Specifically, the Stochastic

  • 8/16/2019 Technical efficients of rice production

    21/53

    Group 9 Page 10

    Frontier Approach (SFA) was used because of its ability to decompose the error term into noise

    and stochastic error.

    The Stochastic Frontier Production Function as independently proposed by Aigner, et al. (1977)

    and Meeusen and Van den Broeck (1977) using a cross sectional data, specified as;

      =   ; ∗ ∗ (−)……………………………………… . . () Where   is the output of farmer  ,   ; denotes a suitable function (e.g., Cobb-Douglas ortranslog),   is the inputs, and β represents the unknown parameters to be estimated and  is theerror term that is composed of two independent elements,  and  such that  = (−).theterm  is a random factor or systematic error accounting for statistical noise (e.g., measurementerrors, extreme weather, omission of significant variable, low rainfall, etc.)  –   not within the

    control of the farmer and   is a non-negative random variable associated with farm-specificfactors which contribute to the

    ℎ   farm not achieving maximum efficiency and ranges between

    zero and one.

    The maximum potential output for a given set of inputs,   which can be expressed as:∗ =   ; ∗ ………………………………………………… .(ii)

    Thus, the measure of technical efficiency of the ith farm denoted by  is defined as the ratio ofthe observed output to the corresponding potential output, which is evinced as:

    = ∗ =   ;∗( −)   ;∗ = p (−)………………(iii)

  • 8/16/2019 Technical efficients of rice production

    22/53

    Group 9 Page 11

    This expression demonstrates that the difference between  and ∗ is embedded in  . If  = 0,then  = ∗, implying that the production lies on the frontier.

    The simple stage maximum likelihood estimation approach was adopted in this study since the

    two stage approach violates the distributional assumption underlying the error term.

    Although in literature, the Cobb – Douglas production function is commonly used in the

    estimation of technical efficiency because of its simplicity. Its restrictiveness of constant returns

    to scare makes it not applicable in this study. The translog production function is used instead

     because it allows for the combination of square and cross product terms to improve the fit of the

    model (Coelli, 1995 and Wilson et al ., 1998).

    The translog production function is specified objectively is;

    ln = 0 + 3

    =1ln Xk і + 12

     3

    =1 + ln Xk і   ln Xjі + і − і  ……………………………………………….(iv)

    3

    =1 

    Where; Xk і represents the amount of input j used by the ith rice farmer and there is assumption of

    symmetry in input cross effects by considering  =  .

  • 8/16/2019 Technical efficients of rice production

    23/53

  • 8/16/2019 Technical efficients of rice production

    24/53

    Group 9 Page 13

    Table 1.2 shows the names of the variables in equation(), their variables and units ofmeasurement.

    Table 1.2: Variable Name and Units of Measurement

    Variables Description Unit Of Measurement

    CRT Availability of credit GH¢

    Age Age of respondent Years

    EDU Years in education Years

    EFF Experience of farmer Years in rice farming

    EXT Extension office 1= extension contact

    0= no extension contactGEN Sex of Respondent 1= male

    0= female

    HH Household size Number

    The stochastic frontier estimated equation (v) and equation (vi) in a single stage.

    With the Cobb-Douglas production function, the estimated parameters represent output elasticity

    of the corresponding inputs. In the translog model (4), the elasticity of output with respect to the

    different inputs are functions of the level of inputs involved and generally expressed as:

    ln () ln   =   +     +   ≠1   ……………………… . .………………………… (vii) 

    However, when the output and input variables have been scaled by their respective means, the

    first-order derivative or coefficient can be interpreted as elasticities of output with respect to the

    different input. The sum total of the output elasticity is the estimated scale elasticity which

  • 8/16/2019 Technical efficients of rice production

    25/53

    Group 9 Page 14

    measures return to scale for an industry. If the ε > 1, it indicates increasing return to scale, ε < 1,

    it indicates decreasing return to scale, while if ε = 1, indicate constant return to scale.

    1.6 Scope of the Study

    The study focused on identifying the key economic factors affecting rice production, estimating

    the level of technical efficiency, measuring the returns to scale of rice production as well as

    estimating the magnitude and effects of the factors influencing technical efficiency of rice

     production. The study will focus on the Wa West district which is one of the eleven districts of

    the Upper West Region.

    1.7 Organisation of the study

    This study is organised into five chapters. Chapter two of the study deals with the profile of the

    study, chapter three covers the literature review, chapter four covers discussion of results and

    chapter five contains summary, conclusion and recommendation.

  • 8/16/2019 Technical efficients of rice production

    26/53

    Group 9 Page 15

    CHAPTER TWO

    PROFILE OF WA WEST DISTRICT

    2.1 Introduction

    This chapter covers the physical characteristics, demographic characteristics and the district

    economy of Wa West. 

    2.2 Physical Characteristics

    2.2.1 Location and Size

    Wa West district is one of the communities in the Upper West Region with Wechiau as the

    district capital. Wa West district is a community in one of the eleven districts that make up the

    Upper West Region created in 2004 by legislative instrument 1751. The district is located in the

    western part of the Upper West Region, approximately between Longitudes 9º40’N and 10º10ºN

    and also between latitudes 2º20ºW and 2º50ºW. The total area of the district is approximately

    1,856 square km. This constitutes about 10 % of the region’s total land area, which is estimated

    at 18,478 square km. Based on the location and the nature of the economic activities of the

    district, it is the food basket of the Wa Municipality. This means there is a ready market for the

    district’s agricultural produce. There are very little commercial and no political activities

     between the district and Burkina Faso. The proximity of Wa West District to Burkina Faso

    however places it in a good position to take advantage of suggestions made by the “Northern

    Development Initiative” in the Northern Development Strategy which proposes the promotion of

    a Savannah-Sahel Regional Market amongst other initiatives.

  • 8/16/2019 Technical efficients of rice production

    27/53

    Group 9 Page 16

    2.2.2 Topography, Drainage and Geology

    The Wa West District topography is gently rolling with a few hills ranging between 180 and 300

    meters above sea level. It is drained by one main river  –  the Black Volta, to the west marking the

     boundary between the district and the Republic of Burkina Faso. The Black Volta and its

    tributaries is the main drainage system in the District. The Black Volta and its several feeder

    tributaries present opportunities for irrigation in the district that can promote all year round

    farming. Most of the tributary streams are seasonal, thus disrupting communication during the

    rainy season along all the major roads to the District capital.

    The soil types found in the district are mostly Leptosols, Lixisols and Vertisols, which makes up

    a greater proportion of the soils types found in the entire district. There are also strips of

    Fluvisols along the flood plains of the Black Volta as well as sandy loams along some of its

    tributaries. The general nature of the soils in district, coupled with the traditional land use

     practices and limited rainfall, tend to have adverse effect on crop production. This forces the

    youth to look for sustenance elsewhere at the expense of their lives or health.

    2.2.3 Climate and Vegetation

    The Wa West District lies within the Guinea Savannah Zone which is characterized mainly by

    short grasses and only few woody shrubs and trees. Common trees found in the community

    consist of drought and fire resistant trees such as baobab, dawadawa, shea trees and kapok.

    Commercial tress such as Cashew and Mangoes are also found in the community. The vegetation

    is very congenial for livestock production, which contributes significantly to household incomes

    in the community. The greatest influence on the vegetation is the prolonged dry season. During

  • 8/16/2019 Technical efficients of rice production

    28/53

    Group 9 Page 17

    this period, the grass becomes dry and the subsequent bush burning leaves the area patched and

    mostly bears of vegetation. Consequently, the torrential early rains cause soil erosion. Bush

     burning reduces the vegetative cover and adversely affects rainfall. Transpiration is reduced

    considerably and this affects average annual rainfall totals.

    The climate of the district is tropical continental type with the mean annual temperature ranging

     between 22.5°C to 45°C. A lesser known and used environmental resource is what is referred to

    as diurnal temperature variation. The Wa West District, like most of the other districts of the

    three northern regions have the comparative advantage during the months of November to

    February (the harmattan period) of having relatively cool night temperatures of between 18°C to

    22°C and rather hot day temperatures of as high as 38°C to 40°C. The relatively cool nights are

    very suitable for stimulating good flowering in fruits and vegetables, heavy fruit setting and good

    ripening and colour turning in fruits. This gives the northern part of Ghana that comparative

    advantage of this type of less known climatic resource for generating other economic benefits;

    and Wa West District should not hesitate to take full advantage of this. The period between

    February and April is the hottest. Between April and October, the Tropical Maritime air mass

     blows over the area which gives the only wet season in the year; with the suitable rainfall for

    agriculture being effectively only four to five months in a year. The poor rainfall pattern leads to

    the migration of the youth, a factor associated with the underdevelopment of the human resource

     base of the district.

  • 8/16/2019 Technical efficients of rice production

    29/53

    Group 9 Page 18

    2.3 Demographic Characteristics

    2.3.1 Population Size and Growth Rate

    The National Population and Housing census carried out in 2000 put the community

     population at 2627, out of which 1255 are males and 1372 being females.

    The 2000 National Population and Housing census results put the entire Wa West District

     population at 69,170. This is about 6.20% of the Upper West Region’s total population of

    576,583. The population comprises 33,547 males and 35,623 females representing 48.50% and

    51.50% respectively and the sex ratio is 94 males to 100 females (Source: 200 NPHC). Using

    the growth rate of 1.7%, the projected population for 2009 is 80,502, comprises 39,043 males

    and 41,459 females representing 48.50% and 51.50% respectively and the sex ratio is 94 males

    to 100 females (Source: WWDA 2009). There is intense pressure on the natural resources

     particularly land for agricultural production as well as socio-economic facilities. The growth rate

    of the District is estimated to be 1.7 %. This is below the national growth rate of 2.7%.

    2.3.2 Reli gion and Ethnici ty

    With respect to religious composition, all members of the community are Muslims. The most

     predominant tribe in the District is the Brefor with dialectical variations, followed by Waales and

    Dagaabas. There are other minor tribes within the district such as the Hausa, Asantes, etc. They

    co-exist peacefully and inter-marry.

  • 8/16/2019 Technical efficients of rice production

    30/53

    Group 9 Page 19

    2.4 District Economy

    The major economic activities in the district include agriculture, commerce rural industry,

    tourism and other services. Majority of the people in the district are subsistence farmers. Most of

    the women in this community engage in rice production, pito brewing, petty trading and shea

     butter extraction.

    2.4.1 Agri cultur e

    Agriculture accounts for 80% of the Wa West District economy. Most farmers undertake a

    combination of crops and animal production. The main crop grown by the farmers in the

    community are groundnut. They also cultivate some other crops alongside, some of which

    include millet, cowpea and maize. However, productivity of crops is low due to a combination of

    factors such as inadequate rainfall, low soil fertility, poor cultural practices and low technology

    application. For example rainfall distribution and amount in the district are concentrated in

    within the second and third quarters of the year. Since the community is dependent on rainfall

    agriculture, the implication of such rainfall pattern is low crop productivity and inability to

     produce all year round, hence there is a high risk of food insecurity. Low crop productivity is one

    of the major causes of poverty in the community.

    This situation calls for the need to enhance the provision of water for dry season gardening and

    improved agricultural technologies. It is therefore strongly recommended that irrigated

    agriculture should be increased substantially in all parts of Wa West District; by taking

    advantage of the perennial water of Black Volta, developing irrigation water bodies from its

    feeder tributaries and from the available underground water; as well as rain water harvesting.

  • 8/16/2019 Technical efficients of rice production

    31/53

    Group 9 Page 20

    2.3.2 I rr igational In fr astructure

    The Wa West District Assembly places a high priority on irrigation facilities to enhance dry

    season gardening. There are sixteen dams and dugouts in various communities in the District.

    However, few of them are used for irrigation purposes. The total land area under irrigation in the

    District is 84Ha. This shows that irrigation is highly underdeveloped in the districts, despite its

    critical role in the farming activities and poverty reduction strategies of the people. There is

    need to expand the irrigatable area through appropriate technologies like creating small water

    retention reservoirs during road construction as well as construction of dug-outs and check dams

    along water ways. Such small dams will not only support dry season gardening on a small scale

     but also provide water for animals, particularly during the dry season. The advantage of such

    small dams located in various communities rather than one big dam is the spread of benefits

    across the district.

    2.3.3 Market Centers

    There are eight major marketing outlets in the district. These are Dorimon, Dabo, Taanvare,

    Wechiau, Vieri, Ponyentanga, Nyoli and Gurungu. These markets are organized on a 6-day

    cycle. Agro-products and inputs are readily sold and purchased in these markets. Farm produce

    in Tanina are mostly taken to Ponyentanga for sale on scheduled market days. Sometimes they

    are also brought to the Wa market in case of large outputs. Marketing of food crops and

    household commodities is mostly done by women. The purchase and sale of livestock is

    however, in the hands of men. Physical access to markets is however poor due to poor road

    network and condition. Thus the improvement of infrastructure has the potential of increasing the

    district revenue.

  • 8/16/2019 Technical efficients of rice production

    32/53

    Group 9 Page 21

    2.3.4 Financial Services

    There are no banking and non-banking services in the community. This has made access to credit

    very difficult thereby adversely affecting all aspects economic activities. Thus all workers

    receive their salaries in Wa and all farmers depend on the profits from the sale of their farm

     produce. This has implication for absenteeism.

  • 8/16/2019 Technical efficients of rice production

    33/53

    Group 9 Page 22

    CHAPTER THREE

    LITERATURE REVIEW

    3.1 Introduction

    This chapter looks at some works of researchers on the determinants and technical efficiency of

    rice farm. It was employed to provide deductive explanations for the factors that rice production

    and technical efficiency in other areas. This chapter discusses these factors, their magnitude and

    effect on rice output in their respective areas. The chapter also looks at the importance of rice

    farming and the necessary condition for rice farming as well as production potential and national

    rice policies and development strategies.

    3.1 Importance and uses of rice

    Rice provides us with proteins, carbohydrates, lipids, plenty of vitamins and minerals. Rice,

    highly rich in vitamin B1 is necessary for the brain to absorb glucose and to transform that food

    into energy, vitamin A in rice, functions as anti-oxidant in preventing diseases (The health daily,

    2011). Rice consumption in Ghana increased from 7.4 kg per caput/annum between 1982 and

    1985 to 13.3 kg per caput/annum (MoFA, 1996) resulting in a total annual consumption of 239

    400 tonnes of milled rice (i.e. estimated on 18 million population).

    3.2 Production Potential and National Rice Policies and Development Strategies

    Ghana has great potential to expand its present average rice production area of 89 700 ha by 200

     percent if its vast area of inland valleys and swamps is fully exploited (Obeng, 1994). The

  • 8/16/2019 Technical efficients of rice production

    34/53

    Group 9 Page 23

    successful control of the black flies which cause onchocerciasis (river blindness), particularly in

    the White Volta basin, has opened up for development the vast lands of the fertile Fumbesi

    Valley in the Interior Savannah zone, and this has been the main factor allowing for an increase

    in rice area from 61 000 ha in 1990 to 89 700 ha in 1996. The government over the years has

    introduced a number of policies and strategies to rice production in the country. Some policies

    and strategies under the Medium-Term Agricultural Development Programme include; the

    exploitation of the vast lands of the inland valleys and swamps, reduced emphasis on

    conventional irrigation schemes as well as increased research and technology transfer aimed at

    an efficient utilization of agricultural inputs.

    3.3 Other Studies on Determinants and Technical Efficiency of Rice Farm

    Diagne et al. (2013) studied the production and technical efficiency of rice farmers in the

    Senegal River Valley. They obtained technical efficiency scores in the range of 55% to 60% and

    estimated that land size, fertilizer, herbicides, credit facilities, farming practices and labour.

    Others include storage facilities, seedling and irrigation. Krishna et al (2014) argued that, the

    average Filipino rice farmer operates about 1.22 ha farm area ranging from 0.1 to 4.8 hectares,

    suggesting a significant variability in farm sizes among rice farmers. The total value of farming

    retained by the farmer after harvest is about averagely 109.02 cavan. With the expectation of

    higher return from rice farming, total acreage is positively significant factor indicating a 1%

    increase in acreage, increases rice production by 0.48%. Farm size is a critical factor associated

    with the individual farmer productivity. A Research Paper presented by Nicholas (2010) on

    factors determining rice production in Kenya revealed that Paddy is significant at 99%

    confidence interval with a positive coefficient of 0.0000896 ton/ha.

  • 8/16/2019 Technical efficients of rice production

    35/53

    Group 9 Page 24

    Availability of water also plays a vital role on the performance of an irrigation project and also

    indirectly influences the cost of the project. It was observed in Kenya that, for the last 25 years,

    the agricultural production has not matched the increasing population. Therefore, development of

    irrigation is critical in addressing this challenge despite the high costs involved (Ngigi, 2002).

    Chambers and Moris (1973) observed that, planting in dry season reduces technical efficiency of

    rice production by 8%. A study by Bogahawatte (2010) on Sri Lanka concluded that, the

     proportion of land planted to modern varieties of irrigation was statistically significant at 5%.

    For the dry zone lagged rainfall, the proportion of rice area planted to modern varieties was

    statistically significant at the either 1% level. The values of the R2 were 0.559 and 0.870 for thewet and dry zones respectively.

    Fertilizer usage is another factor that affects rice productivity. In 1981, Food and Agriculture

    Organization of the United Nation noted that, after land and water, fertilizer is probably the most

    important input leading to increasing yields, and they were responsible for some 55% of the

    increase in yields in developing countries between 1965 and 1976. In the Philippines Koirala et

    al (2014) noted that, the cost of fertilizer is a positive and statistically significant in explaining

    rice production at 10%. Fertilizer cost is negative and statistically significant; indicating a 1% in

    total fertilizer cost reduces technical efficiency by 2.85% (Diagne et al., 2013). The amount of

    labour hired is another factor that affects rice productivity. Noij and Niemeijer (1988) observed

    that, by varying the amount of labour hired, or optimizing the moment at which labour is hired,

    they can try to increase paddy yields. The study revealed that, though labour is a determinant of

    rice production, the quality of the labour force helps to increase yield significantly.

  • 8/16/2019 Technical efficients of rice production

    36/53

    Group 9 Page 25

    Other studies argue that, the level of education of a farmer also affects rice productivity.

    Kalirajan and Shand (1985) argued that, even though the level of schooling affects productivity,

    the level of education of a farmer is not necessarily significantly related to the level of yield.

    Their findings revealed that, formal education of a farmer had an independent effect on yield, but

    it was not significant while non-formal education was found to have a significant and greater

    influence on yield. Pudasaini (1983) found that, even though education enhances agricultural

     production, the way in which it is done differs from environment to environment –  that is, in a

    technological dynamic agricultural system, education improves farmers’ allocative ability,

    enabling them to select improved inputs and optimally allocate existing and new inputs among

    competing uses. Adesina and Djato (1996) investigated the extent to which education affects

    inefficiency in agriculture using a sample of 410 rice farmer s in northern Côte d’Ivoire. They

    concluded that educated farmers are not more efficient than non-educated farmers because the

    latter may have an empirical knowledge obtained from cumulative farming experience..

    Agricultural extension represents a mechanism by which information on new technologies, better

    farming practices and better management can be transmitted to farmers. Kalirajan (1981)

    explained that, extension workers’ limited contacts with farmers were  responsible for the

    difference between the actual and maximum yields. Owens et al. (2001) investigated the impact

    of farmer contact with agricultural extension services on farm productivity using panel data

    obtained during the period 1993 – 1997 in Zimbabwe. The results shows access to agricultural

    extension services raises production by about 15% and differed across individual crop years. In

     Nigeria, Ogundele and Okoruwa (2004) computed the average technical efficiency for each rice

    farm group at 90% with extension contact positively significant to rice production.

  • 8/16/2019 Technical efficients of rice production

    37/53

    Group 9 Page 26

    CHAPTER FOUR

    DISCUSSION OF RESULTS

    4.1 Introduction

    This chapter presents the summary of descriptive analysis, determinants of rice productivity,

    level of technical efficiency, returns to scale of rice productivity and determinants of technical

    efficiency.

    4.2 Socio-Demographic Characteristics

    Table 4.1 shows the demographic characteristic of the rice farmers in the Wa West district.

    Table 4.1 Demographic Characteristics of Surveyed Rice Farmers. 

    Characteristics Mean Min. Max. Frequency Percentage (%)

    Age: 36.03 18 75 - -18-35 - - - 114 57.0

    36-50 - - - 68 34.0

    51+ - - - 18 9.0

    Sex:  - - - - -

    Male - - - 151 75.5

    Female - - - 49 24.5

    Household size:  9.18 1 25 - -

    1-5 - - - 35 17.56-10 - - - 103 51.5

    11-15 - - - 43 24.0

    16+ - - - 14 7.0

  • 8/16/2019 Technical efficients of rice production

    38/53

    Group 9 Page 27

    Continuation of table 4.1

    Characteristics Mean Min. Max. Frequency Percentage (%)

    Religion:  - - - - -

    Christian - - - 138 69.0Islam - - - 44 22.0

    Traditional - - - 16 8.0

    Others - - - 2 1.0

    Ethnicity : - - - - -

    Waala - - - 55 27.5 

    Dagaaba - - - 140 70.0 

    Kassenas - - - 1 0.5 

    Sisaala - - - 0 0

    Chakali - - - 1 0.5 

    Others - - - 3 1.5 

    Educational level: - - - - -

     No Education - - - 141 70.5 

    Primary - - - 20 10.0 

    JHS - - - 17 8.5 

    SHS - - - 19 9.5 

    Diploma - - - 3 1.5 

    Degree - - - 0 0 

    Source: computed from Rice farmers Survey Data, 2013 

    In table 4.1, majority of the farmers in the district are in their youthful age and most these

    farmers have no formal education.

    4.3 Determinants of Rice Productivity

    The generalized likelihood ratio test specifies that the coefficients of the second order variables

    in the translog model are zero meaning that the Cobb – Douglas frontier is strongly rejected. Thus,

    the translog stochastic frontier production function is more suitable.

  • 8/16/2019 Technical efficients of rice production

    39/53

    Group 9 Page 28

    Table 4.2 presents the estimates of the SFA, indicating the variables, their parameters,

    coefficients, standard error and t-ratio. It also shows the significant levels of the variables.

    Table 4.2 Estimates for the Stochastic Frontier Translog Model

    Variables Parameter Coefficient Standard-Error t-ratio

    Constant 0  0.82*** 0.15 5.60Lnlabour 1  -0.02 0.02 -1.14Lnland 2  0.50*** 0.05 9.78Lnseed 3  0.26*** 0.10 2.67Dfertilizer 4  -1.50*** 0.63 -2.37Lnfertilizer

    5  1.96*** 0.72 2.73

    Dother 6  -0.15** 0.09 -1.67Lnother 7  0.12 0.11 1.090.5()2  8  -0.001 0.038 -0.0140.5()2  9  0.56*** 0.20 2.880.5()2  10  0.42*** 0.18 2.380.5()2  11  -0.83** 0.39 -2.120.5(ℎ)2  12  -0.08 0.09 -0.87Lnlabour * Lnland 13  -0.08 0.07 -1.27Lnlabour * Lnseed

    14  0.00007 0.063 0.001

    Lnlabour * Lnfertilizer 15  0.19*** 0.07 2.70Lnlabour * Lnother 16  0.14** 0.06 2.20Lnland * Lnseed 17  -0.43*** 0.18 -2.37Lnland * Lnfertilizer 18  -0.57*** 0.23 -2.50Lnland * Lnother 19  0.35 0.32 1.09Lnseed * Lnfertilizer 20  0.13 0.14 0.92Lnseed * Lnother 21  0.14 0.23 0.61Lnfertilizer * Lnother 22  -0.03 0.09 -0.30 N 200

    σ2 = (

    σ2 +

    σ2 )  0.328*** 22.82

    ϒ = (σ2 /σ2)  0.9999*** 444625.4σ2   0.0001σ2   0.3279Statistically significant at levels of * 0.10; ** 0.05; and *** 0.01.

  • 8/16/2019 Technical efficients of rice production

    40/53

    Group 9 Page 29

    The coefficients of the fertilizer and othercost (both dummy) are significant at 1% and 5% levels

    respectively which show that the estimates would have been biased if they were not included in

    the model. Gamma (ϒ) is a measure of level of the inefficiency in the variance parameter; it

    ranges between 0 and 1. For the translog model, ϒ is estimated at 0.999, this can be interpreted

    as follows: 99.9 percent of random variation in maize production is explained by inefficiency

    and only 0.1 is coming from stochastic noise. The input coefficients have a straightforward

    interpretation of the input variables since they were scaled before estimation.

    The estimates show that, land, seed and fertilizer are positively and statistically significant at 1%

    level and therefore they are the major determinants of rice production. This means that, any

    increment in these variables will increase affect output positively. For land, a 1% increase in land

    size (hector) will increase output by 50%. This implies, for any additional hectare farmed, rice

    farmers can increase output by 50%. These findings confirm the conclusions reached by

    Ogundele and Okoruwa (2004) that farm size significantly determines levels of technical

    efficiency and the results of Parikh and Shah (1995) that land fragmentation leads to technical

    inefficiency.

    The estimate shows that, fertilizer application is positively significant at 1% level. It is the

    highest significant variable of 1.96 the influences rice production in the district, showing that a

    1% increase in fertilizer will increase output by 196%. This implies that, if a farmer increases the

     bags of fertilizer he or she used in the 2013 planting season by 1%, the farmer will cultivate

    output almost twice he or she cultivated. This finding is consistent with the findings of Koirala

    (2012) in the study of Determinants of Rice Productivity and Technical Efficiency in the

  • 8/16/2019 Technical efficients of rice production

    41/53

    Group 9 Page 30

    Philippines. For seedling, a percentage increase in quantity of seed for sowing will increase

    output by 26%. This means that, farmers in the region can increase rice output by 26% if they

    add an additional bowl of seed for planting.

    4.4 Level of Technical Efficiency

    The predicted mean technical efficiency is estimated to be 0.40 in the 2013 production year. This

    indicates that on the average, rice farmers produced 40% of the potential output, given the

     present state of technology and input level. However, 60% of potential output is not realized.

    Therefore, the possibility of increasing rice farming productivity in the district by an average of

    60% can be achieved in the short run by adopting best rice farming practices.

    Figure 4.1 depicts the level technical efficiency of individual rice farmers grouped into ranges

    shown in Appendix A4.

    Figure 4.1 Technical Efficiency Chart 

    0

    10

    20

    30

    40

    50

    60

    70

    80

    90

    0-20 21-40 41-60 61-80 81-100

         F

         R     E     Q     U     E     N     C     Y

    LEVEL OF EFFICIENCY

  • 8/16/2019 Technical efficients of rice production

    42/53

    Group 9 Page 31

    The estimated technical efficiencies for rice farmer in the district range between 0.11 and 0.98.

    About 42.5% of the farmers have technical efficiency index above 21 - 40, whereas 9.5% of the

    farms have efficiency indices between 81- 98.

    4. 5 Returns to Scale of Rice Production

    Table 4.4 shows the summation of the partial elasticity of production with respect to significant

    input for the homogeneous function which is 2.72. In this case, the production function can be

    used to estimate the magnitude of returns-to-scale to rice farming.

    Table 4.3 Technical Elasticity of Significant Level Output.

    Elasticity with respect to

    Land Seed Fertilizer Total

    0.50*** 0.26*** 1.96*** 2.72

    All are statistically significant at levels of *** 0.01

    Constant returns to scale only hold if the sum of all partial elasticity is equal to one. In this study,

    land, seed and fertilizer were all positively significant at 1% showing increasing returns to scale.

    Therefore, an increase in all inputs by 1% will increase rice yield by more than 2.72%. This

    result is consistence with estimate of Sharma and Leung (1998) that had a corresponding

    estimate of 1.86.

  • 8/16/2019 Technical efficients of rice production

    43/53

    Group 9 Page 32

    4.6 Determinants of Technical Efficiency

    In table 4.6, the coefficient estimated for gender dummy is significantly negative at 10%,

    indicating that farm decision makers who are males operate more efficiently than their female

    counterparts. This might have resulted by the division of labour that assigns a domestic role to

    women in Wa West district as noted by Assibey - Mensah (1998).

    Table 4.4 shows the various technical efficiency variables, their parameters, coefficients,

    standard error and t-ratio.

    Table 4.4 Technical Inefficiency Model Estimates

    Variables Parameter Coefficient Se t-ratio 

    Constant 0  1.51*** 0.19 7.94Age 1  0.01 0.01 1.26Gender 2  -0.24* 0.16 -1.54Education 3  -0.019 0.015 -1.26Household

    4  -0.06*** 0.016 -4.00

    Extension 5  -0.36*** 0.15 -2.44Years of rice 6  0.007 0.009 0.759Credit 7  -0.006 0.207 -0.029Statistically significant at levels of * 0.10; ** 0.05; and *** 0.01.

    The coefficient of the extension contact (dummy) was significantly negative at 1%. This

    indicates that farmers that received extension visits are more technically efficient than farmers

    that did not get any extension service. This was consistent with the findings of Parikh and Shah

    (1994) who concluded in Pakistan that extension service was important factor in explaining the

    technical efficiency of rice farmers.

  • 8/16/2019 Technical efficients of rice production

    44/53

    Group 9 Page 33

    The coefficient of the household size is positively related to technical efficiency and significant

    at 1%, suggesting that a large family size enhances technical efficiency on rice production. The

    significance of larger household size is to free farmers from scarcity of hired labour for farm

    activities. This is consistent with the findings of Al-hassan (2008) in his study of technical

    efficiency of rice farmers in Northern Ghana.

  • 8/16/2019 Technical efficients of rice production

    45/53

    Group 9 Page 34

    CHAPTER FIVE

    SUMMARY, CONCLUSIONS AND RECOMMENDATION

    5.1 Introduction

    This chapter outlines the major findings of the study, conclusions, policy recommendations,

    limitations of the study and suggestions for future research.

    5.2 Summary of Major Findings

    The frontier results show that, farm size, fertilizer, and quantity of seed were observed to affect

    rice output significantly and hence are the determinants of rice production in the Wa West

    district. Farm size, land and quantity of seed were significant at 1%. About 70% of the rice

    farmers did not apply fertilizer to their rice farm in the 2013 planting season. The maximum land

    size for rice cultivation is 10 hectares with a minimum of 0.5 hectare given the mean value of 2.2

    hectare. On the average, rice farmers in the district sowed 17.8 bowls of rice seeds per hectare

    with a maximum of 61.9 bowls and minimum as 2.5 bowls.

    The study found that, rice farmers in the Wa West district are approximately 40% technically

    efficient. The highest efficient farmer is approximately 98% technically efficient while the least

    is approximately 11% technically efficient.

  • 8/16/2019 Technical efficients of rice production

    46/53

    Group 9 Page 35

    The return to scale on rice farming in Wa West district is 2.27 showing increasing returns to

    scale in the district. Therefore, an increase in all inputs by 1% will increase rice yield by more

    than 2.72%.

    The coefficients of gender, household and extension contact is significant from the technical

    inefficiency estimates. The coefficient of household is 0.06, extension contact is 0.36 and gender

    is 0.24. Household and extension contact is significant at 1% whiles gender is significant at 10%.

    They are all positively affecting technical efficiency of rice farmers in the region.

    5.2 Conclusion

    This study was conducted to initiate a formulation of research and primarily studies on the

    analysis of rice production in the Wa West district. Ultimately, it is apparent that, rice production

    in region is an important economic activity to indigenes with a very lucrative benefit.

    Findings from the study indicated that rice farming in the region is influenced by fertilizer, land,

    and quantity of seed. It was also revealed that, majority of the rice farmers agree to fertilizer

    usage as a very important factor but fertilizer usage was low among the farmers  –  because they

    cannot afford it though they knew the importance of its usage.

    Most of the farmers in the district are technically inefficient. Rice farming in the district is

    characterized by increasing returns to scale. Also, majority of the respondents do not have access

    to credit facility due to lack of knowledge on how to apply, inadequate collateral and high

  • 8/16/2019 Technical efficients of rice production

    47/53

    Group 9 Page 36

    repayment rate among others. Also contact with extension officers also enhances efficiency

    among rice farmers.

    5.3 Recommendation

    The rice industry has played a major role in helping the Ghanaian economy in achieving

    economic stability, poverty reduction, and income equality as well as feeding the economy.

     Nevertheless, the rice industry faces some challenges that require special attention to overcome

    these challenges of the rice industry.

    Government has an important role to play in determining rice output. Government should

    therefore subsidize the cost of rice farming inputs such as fertilizer and provides farmers with

    improved rice seedlings at a very low price. Access to seeds - particularly to varieties with

    import substitution potential - needs to be increased.

    From the analysis, enough evidence was found to support literature that extension contacts

    enhance the technical efficiency of rice farmers in the Wa West district. Therefore the study

    recommends that, the Ministry of Food Agriculture should increase the number of extension visit

    to rice farmers in the district and also provide training, seminars etc in order to increase output.

  • 8/16/2019 Technical efficients of rice production

    48/53

    Group 9 Page 37

    5.4 Limitations of the Study

    The study was limited by its inability to include capital as one of its inputs due to difficulties in

    measuring the aspect of the capital that was used in the said farming season to yield the rice

    outputs.

    Also, out of 208 communities within the district, the study analyzed data from 10 communities.

    This was due to logistics reasons such as time.

    Lastly, the study was unable to test Cobb-Douglas production function against the translog

     production function to determine which is suitable for the model.

    5.5 Suggestions for Future Search

    The study recommends for future studies to measure and include capital as one of the inputs,

    include more sample size and test for hypothesis between the Cobb-Douglas production function

    and translog production function to determine which of them is suitable for the study.

  • 8/16/2019 Technical efficients of rice production

    49/53

    Group 9 Page 38

    REFERENCES

    Adesina, A. A., & Djatoe, K. K. (1996). Farm size, Relative Efficiency, and Agrarian Policy in

    Cote d'Ivoire: Profit function Analysis of Rice farmers.  Journal of Agricultural Economics,

    14(2), 93 - 102.

    Aigner, D. J., Lovell, A. K., & Schmidt, P. (1977). Formulation and Estimation of Stochastic

    Frontier Production Function Models. Journal of Econometrics, 6(1) , 21 - 37.

    Ajibefun, I. A., & Daramola, A. G. (2003). Efficiency of Micro-Enterprises in the Nigerian

    Economy, AERC research Paper No. 134. The African Economic Research Consortium .

    Babbie, E. (1990). Survey Research Methods. (2nd Edition). Belmont: CA: Wadsworth.

    Bardhan, P. (2000).  An Empirical Analysis of 48 Irrigation Communities in South India. 

    Chicago: University of Chicago.

    Bauer, P. W. (1990). Recent Developments in The Econometric Estimation of Frontiers.  Journal  of Econometrics, 46(1-2), 39 - 56.

    Bogahawatte, C. (1982). Governmental Agricultural Policies and Their Impact on Supply and

     Demand for Rice in Sri Lanka. Texas: Washington DC.

    Byiringiro, F., & Reardon, T. (1996). Farm productivity in Rwanda: Effects of farm size,

    erosion, and soil conservation investments. Agricultural   Economics, 15(2), 127 – 136.

    Chambers, R., & Moris, J. (1973).   Mwea, an Irrigated Rice Settlement in Kenya.  Munchen:WeltforumVerlag.

    Coelli, T. J. (1995). Recent Development in Frontier Modeling and Efficiency Measurement. Australian Journal of Agricultural Economics, 39(3), 215 - 245.

    Coelli, T. J. (1995). Estimators and Hypothesis Tests for a Stochastic Frontier Function: a MonteCarlo analysis. Journal of Productivity Analysis, 6(9), 247 – 268.

    Diagne, M., Demont, M., Abdoulaye, S., & Diaw, A. (2013). Self Sufficiency Policy and

    Irrigated Rice Productivity in the Senegal River Valley. Journal of Food Security, 5(1), 55 - 68.

    Food and Agriculture Organisation (FAO) (2006). The State of Food Insecurity In The World. 

    Rome: FAO of the United Nation.

    Food and Agriculture Organisation (1981).  Agriculture toward 2000. Rome: FAO of the United Nation.

  • 8/16/2019 Technical efficients of rice production

    50/53

    Group 9 Page 39

    Farrell, M.J. (1957). The Measurement of Productive Efficiency.  Journal of the Royal StatisticalSociety, 12(3), 253-281.

    Frank, N., & Rudo, N. (1988).  Resident Tenants at the Ahero Irrigation Scheme, Householdeconomics and nutrition. Ahero: Kenya.

    Green, W.H. (2002). Limdep Version 8.0: Econometric Modeling Guide. New York: Plainview.

    Greene, W.H. (1980). Maximum Likelihood Estimation of Ecometrics Frontier Functions.   Journal of Econometrics, 13(1), 27 - 56.

    Institute of Statistical Social and Economic Research (2008). The State of The Ghanaian

     Economy in 1999. Retrieved from Ghana Business News.com: www.ghanabusinessnews.com

    Kalirajan, K. P., & Shand, R. T. (1985). Types of education and agricultural productivity: Aquantitative analysis of Tamil Nadu Rice farming. Journal of Development Studies ,21(2), 232 -243.

    Kalirajan, K. (1981). The Economic Efficiency of Farmers Growing Irrigated Rice in India.   American Journal of Agricultural Economics, 63(3), 566 – 570.

    Koirala, H. K., Mishra, K. A., & Mohanty, S. (2013).  Determinants of Rice Productivity and

    Technical Efficiency in the Philippines. Texas: SAEA.

    Kumbhakar, S. C. & Lovell, C. A. K. (2000). Stochastic Frontier Analysis. UK: CambridgeUniversity Press.

    Kumbhakar, S. C., Ghosh, S., & McGuckin, T. (1991). A Generalised Production FrontierApproach for Estimating Determinants of Inefficiency in US Dairy Farms.  Journal of Business

    and Economic Statistics, 9(3) 279 – 286.

    Lovell, C. A. K., & Schmidt, S. S. (1993). The Measurement of Productive Efficiency. NewYork: Oxford University Press.

    Meeusen, W., & Broeck , J. Van den. (1977). Efficiency Estimation from Cobb – DouglasProduction Functions with Composed Errors. International Economic Review, 18(2), 435 - 444.

    Michael, P. T., & Smith, C. S. (2008 ). Economic Development in the Third World Countries(10th Edition). Singapore: Longman Singapore Publishers.

    Ministry of Food and Agriculture (2009). Annual Report. Accra: Ghana.

    Ministry of Food and Agriculture (2011). Annua Report. Accra: Ghana.

     Ngigi, S. (2002). Review of Irrigation Development in Kenya. Kenya: FAO publications.

     Nyanteng, V. K. (1987).  Rice in West Africa: Consumption, Imports and Production with Projections to the Year 2000. Monrovia: WARDA publications.

  • 8/16/2019 Technical efficients of rice production

    51/53

    Group 9 Page 40

    Ogundele, F.O., & Okoruwa, V.O. (2004). A comparative Analysis of Technical EfficiencyBetween Traditional and Improved Rice Variety Farmers in Nigeria.  African Journal of Economic Policy, 11(1), 91 – 108.

    Owens, T., Hoddinott J., & Kinsey, B. (2001). The Impact of Agricultural Extension on Farm

     Production in Resettlement Areas of Zimbabwe. Oxford:  Centre for the Study of AfricanEconomies, University of Oxford.

    Pandey, S., & Pal, S. (2007). Are less-favoured environments over-invested? The Case of RiceResearch in India. Journal of Food Policy, 32(5 - 6), 606 - 623.

    Pudasaini, S.P. (1983). The Effects of Education in Agriculture: Evidence from Nepal.  American Journal of Agricultural Economics, 65(3), 508 - 515.

    Al-hassan, S., Sarpong, D. A., & Al-hassan, R. (2004). Allocative Efficiency, Employment andRice Production Risk: An Analysis of Smallholder Paddy Farms in the Upper East Region ofGhana. Ghana Journal of Development Studies, 1(2), 142 – 163.

    Al-hassan, S. (2008). Technical Efficiency of Rice Farmers in Northern Ghana. Nairobi: AfricanEconomic Research Consortium.

    Tadesse, B., & Krishnamoorthy, S. (1997). Technical Efficiency of Paddy Farms of Tamil Nadu:An Analysis Based on Farm Size and Ecological Zone. Agricultural Economics, 16(3), 185 – 192.

    Thairu, K. N. (2010).  Agricultural Production and Irrigation Management: The Case of Irrigated Rice Production in Kenya. Kenya: Institute of Social Studies.

    United States Agency for International Development (2009).  Global Food Security ResponseCase Study: Ghana. Washington DC: USAID publications.

    Wade, R. (1989). Village Republics: Economic Conditions for Collective Action in South India. Washington DC: The World Bank.

    Wilson, P., Hadley, D., Ramsden, S., & Kaltsas, L. (1998). Measuring and Explaining TechnicalEfficiency in UK Potato Production.  Journal of Agricultural Economics, 48(3), 294-305.

    World Bank (2002). World Development Indicators, Washington DC: The World Bank.

  • 8/16/2019 Technical efficients of rice production

    52/53

    Group 9 Page 41

    APPENDICES

    Appendix A1

    Crop Production Levels for 2009 

    Type of Crop maize rice sorghum groundnut millet

    2009 output 5850 3500 6270 30260 5040

    Source: Wa West District Agricultural Development Unit, 2009

    Appendix A2

    Total output per hectare of rice cultivation in 2011 for the districts in the Upper West

    region.

    District Output (Per Hectare) Percentage

    Wa Municipal 1.40 9.7

    Lawra 1.60 11.1

    Wa West 2.20 15.2

    Wa East 2.08 14.4

    Sissila East 2.08 14.4

    Sissila West 2.10 14.7

    Jirapa-Lanbussa 1.37 9.3

     Nadouli 1.66 11.5

    Total 14.47 100

    Percentages are group’s own calculation. 

    Source: MoFA - SRID, 2011

  • 8/16/2019 Technical efficients of rice production

    53/53

    Appendix A3

    Descriptive Statistics of Variables

    Variables Unit Minimum Maximum Mean Std. Deviation

    Output Bags 1.00 50.00 7.3425 7.38353 Land size hectare 0.5 10.0 2.185 1.5436

    Labour Man days 0 19162 2614.25 3291.81

    Seed Bowls 1.00 25.00 7.2575 3.93923 

    Fertilizer Bags 0 12 0.38 1.246 

    Othercost Gh¢ 0 1152 39.23 118.474

    Age Years 18 75 36.03 11.512 

    Sex Dummy

    School Years 0 15 2.58 4.563 

    Extension Dummy

    Household No. of pple 1 25 9.18 4.632 

    Credit Dummy 

    Source: computed from Rice farmers Survey Data, 2013 

    Appendix A4

    Technical Efficiency Frequency of Rice Farmers.

    Efficiency Frequency Percentage%

    0-20 28 14

    21-40 85 42.5

    41-60 44 22

    61 –  80 24 12

    81 –  100 19 9.5

    Mean Technical efficiency 0.3951

    Source: Group calculations