Technical Efficiency of Cassava Production in the Savannah Zone of Northern Ghana: Stochastic Frontier Analysis

Abstract

The study adopts a Stochastic Frontier Analysis (SFA) approach to estimate the technical efficiency of cassava production in the Savannah Zone of Northern Ghana. A cross-sectional data from 150 producers generated from a simple random sampling method was used in the analysis. A transcendental logarithmic production functional form fitted into a half-normal distribution model was estimated. The mean technical efficiency of the producers was found to be 51% indicating that about 49% of output level is lost to technical inefficiency. This means that farmers could increase their output level by 49% without additional employment of resources and technology. Technical inefficiency was modelled as a function of farmer specific socioeconomic factors. The hypothesis tested showed that the translog production function best represents the production process. The elasticities of land and planting materials are 0.92 and 0.83 respectively. They are positive but less than one implying they have inelastic effect on the output quantities of cassava obtained. The implication is that 1% increase in the quantities of the inputs will result in less than the corresponding increase in the output level. Other elasticities reported negative values, this means marginal addition of those inputs lead to marginal decrease in outputs. The Scale elasticity is 1.74 implying that the farmers are producing at increasing returns-to-scale.

Keywords: Technical Efficiency, Stochastic Frontier Model, Savannah Zone, Cassava