Allocative Efficiency of Groundnut (Arachis hypogea L.)-Based Cropping Systems in Taraba State, Nigeria

Abstract

Despite numerous efforts by the Nigerian government to revitalize the production of groundnut through research, crop improvement practices and vast resources of land, there seems to be inadequate supply of groundnuts to meet both the local and international market demand. The study examined the allocative efficiency of groundnut-based cropping systems in Taraba State, Nigeria. Primary data were collected from 354 groundnut-based farmers using purposive and random sampling techniques using questionnaires which were administered to groundnut producers in the study area. The data collected were analysed using stochastic cost function. The Maximum Likelihood Estimates (MLE) of the stochastic cost function for groundnut-based cropping systems, namely; sole groundnut, groundnut/maize, groundnut/cowpea, groundnut/sorghum/cowpea,groundnut/sorghum, groundnut/millet and groundnut/cassava show mean allocative efficiencies of 77%, 89%, 83%, 91%, 92%, 91% and 94% respectively. The elasticity of output with respect to cost of labour, cost of groundnut seed, cost of fertilizer, cost of land, cost of transportation and cost of agro-chemicals were positive and statistically significant at both 1% and 5% levels in most of the enterprises. The estimated coefficient of the cost inefficiency model revealed that membership of association, age, household size, educational level, extension visit and farming experience were the dominant sources of allocative inefficiency among the groundnut-based farmers in most of the enterprises. The study recommends that farmers should form co-operative groups in order to address high cost of labour, inadequate access to credit facilities and high cost of agro-chemical. This will help to mobilize savings and improve farmers’ efficiencies.