Measuring the Technical and Cost Efficiencies of Maize Farming in the Northern Region of Ghana: Deterministic and Stochastic Approaches

Abstract

The study sets out to measure the technical, allocative and cost efficiencies of maize farming in the Northern Region of Ghana for the 2014-2015 farming season. The region has 73% of its population as farmers, with maize being the most cultivated and consumed cereal. Stochastic Frontier Analysis (SFA) and Data Envelopment Analysis (DEA) are employed in the estimation. Interviews were conducted on 121 farmers selected through a mixed sampling technique. The study also segregated the quantities and prices of nitrogen and phosphorus from compound fertilizers. Under DEA, the study found an average efficiency of 79%, 67% and 53% for technical, allocative and cost efficiencies respectively. For SFA the results respectively are 77%, 27% and 21%. Cost and allocative efficiency estimates were very low especially for SFA. Using fractional regression analysis, it was found that household structure of farmers determined their technical efficiencies. Maize land size, marital status, education, and maize farming experience were found to affect allocative efficiency whiles marital status, household structure and maize farming experience affected cost efficiency. The study also found that labor was excessively used in the production process. Fertilizer application increased maize productivity more than other inputs. Policy recommendations were made following these findings.

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