The Effect of Structural Adjusment Programme (SAP) on Technical Efficiency on Rice Farming in Nigeria

Abstract

The study analyzed technical efficiency of rice farming in Nigeria using time series data obtained from FAO STAT (FAO Data base) covering a period of 1960 to 2010.

The main feature of the data use includes rice output  and input of land, fertilizer, labour, seed, tractor number and land area under irrigation. The major tool of analysis is stochastic frontier and t-test of difference between two independent mean.

Results of the analysis showed that estimated production function for both OLS and MLE models showed that almost all explanatory variables exhibit expected sign and magnitude except for irrigation input in OLS model. Coefficients of the estimated parameters were all statistically significant in the frontier function while in the average function, the coefficient of capital (X₅) and irrigation (X₆) were not significant.

The estimated mean technical efficiencies values of 94.3 percent for all period; 91.7 percent for pre-SAP period and 95.6 percent for post-SAP period confirm the fact that rice farming in Nigeria experience high technical efficiency over the period of study. The result of the hypothesis of the study also revealed that, there is no significant difference in the mean technical efficiency recorded before SAP and post-SAP period.

The study therefore suggested appropriate policy that will encourage proper and effective use of primary inputs such as land, labour, seed, capital and fertilizer for efficiency improvement.

Key Words:- Rice Farming, Technical Efficiency, Structural Adjustment Programme