TECHNICAL EFFICIENCY OF COCOA PRODUCTION IN OYO STATE, NIGERIA

Abstract

The technical efficiency, determinants of production and the sources of inefficiency in cocoa production in Oyo State are investigated using a stochastic frontier production function which incorporates a model for inefficiency effects. The study employed the use of cross-sectional data from farm survey conducted on a sample of 90 cocoa farmers from seven local government areas in Oyo State. Results showed that, farm size (1%) and fertilizer quantity (1%) are the major factors associated with changes in the output of cocoa production while on the farmer's specific socioeconomic variables, only three, namely: level of education, extension contact and family size were found to be the significant factors accounting for the variation in efficiency among cocoa farmers. The estimated variance parameter () for the farmers was 0.5427 (significant at 1%). The estimated gamma (g) parameter revealed that there are variations in the cocoa output among the cocoa farmers in the area and this variation are due to the differences in their technical efficiencies. The farmers' average technical efficiency is 97%, which suggest an appreciable use of inputs in productivity.