Technical efficients of rice production
Transcript of Technical efficients of rice production
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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:…………………………………..
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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.
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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.
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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.
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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
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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
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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
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LIST OF FIGURES
Figure.1.1: Conceptual Framework………….…….……………………………………………..8
Figure 4.2: Technical Efficiency Chart…....................................................................................30
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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
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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
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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
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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
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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
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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
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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
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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.
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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.
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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
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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
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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)
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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 = .
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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
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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.
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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.
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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
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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.
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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.
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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.
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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.
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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.
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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
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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.
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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.
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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.
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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
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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.
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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.
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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
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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
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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.
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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.
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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.
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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.
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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
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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.
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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.
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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
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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