Efficiency and Its Determinants Among Smallholder Farming Units Supplying Cassava to Commercial Starch Processors in Nigeria: Data Envelopment Analysis Approach

Abstract

Understanding the resource allocation and use efficiency is essential considering the supportive role of agriculture in the advancement of other productive sectors of the economy. Technical efficiency and its determinants were investigated among smallholder cassava-farming and decision-taking units selected from eight states of the southeast and southwest zones of Nigeria. The states’ selection was purposive, being the states in which the IITA-Nestlé cassava starch project was implemented from 2011-2015. However, a multi-stage random sampling technique was used to select a sample of 96 farming units from the clusters established under the project’s out-growers’ scheme. Primary data were collected from the farming units’ heads by administering the pre-tested household survey instrument. Data were analysed using descriptive statistics, inferential statistics, data envelopment analysis, and multivariate ordinary least square regression techniques. The DEA results revealed that majority (73.9%) of the farming units had efficiency scores less than 1 and as such classified as inefficient. Over 30.2% of the cassava farming units had efficient scores greater than 0.8 including 3.1% with scores that ranged from 0.81- 0.99. Farming units with efficiency scores from 0.6-0.8 constituted 17.7% of the sample while those with scores from 0.4-0.6 consist of 33.3%, which also corresponds to the percentage of farming units with efficiencies scores of less than 0.5. Only three variables: cassava farming experience, fertilizer use and quantity of stems used were statistically significant (p<0.05) in explaining cassava farming efficiency. Of these the influence of farming experience was positive while that of fertilizer use and stems were negative. The finding suggests that the elderly and better experienced farmers combined their versatile previous knowledge of farming with willingness to adopt and use improved farming practices to achieve efficiency. Contrary to expectation, fertilizer and stems were associated with less efficiency, a surprising result that could have resulted from misapplication and wastage of the vital resources. The results highlight the need for appropriate training and technical backstopping for the heads of farming units to enhance their knowledge of the good agricultural practices and improve their levels of efficiency.

Keywords: DEA; best farming practices; efficiency; processing; cassava value chain; Nigeria.