Economic Efficiency of Rice Farming:

A Stochastic Frontier Analysis Approach


The future of agriculture is dependent on increase in the use of resources at disposal, it is therefore imperative that strategies to increase agricultural growth should be directed towards increasing efficiency of smallholder farming operations and resource utilization. This study examined the economic efficiency of rice production. Multistage sampling procedure was used to select 240 rice farmers with the aid of a structured questionnaire. Data collected were analyzed with descriptive techniques, Stochastic Frontier Analysis (SFA) and Tobit regression model. The SFA result revealed that input variables such as seed, herbicide and pesticide were positive and had significant effect on rice output. The rice farmers were able to maximize their output by 74% at lowest minimum cost possible. Furthermore, economic efficiency was positively influenced by age, level of education, membership of farmers association, access to public market and access to health facilities while household size, farming experience, bad road condition and distance to nearest market had negative effects. The study concluded that rice farmers were inefficient. Therefore, in order to raise rice production efficiency and improve the livelihood of smallholder farmers, farmers should attend formal and informal education as it is a key policy issue in the study area, farmers should strengthen the existing association structures and organize new farmer’s associations. Also, the local and regional governments were encouraged to provide good road networks, and public market that will enable farmers dispose their produce at attractive places and prices of their choice.


Economics efficiency; Return to scale

Abate, T. G., Francesconi, G.N. & Getnet, K. (2014). Impact of agricultural cooperatives on smallholders‘ technical efficiency: Empirical evidence from Ethiopia. Annals of Public and Cooperative Economics, 85(2), 257- 286. DOI:
Adetunji, M.O., O.A Olaniyi & M.O, Raufu (2007). Assessment of benefits derived by cocoa farmers from cocoa development unit activities of Oyo State. Journal of Human Ecology, 22 (3), 211 – 214.
Ahmed F. F., Eugene, C. E. & Abah, P. O. (2015). Analysis of food security among farming households in Borno State, Nigeria. Journal of Agricultural Economics, Environment and Social Sciences, 1(1),130–141.
Ahmed M, Melesse K. (2018). Impact of off-farm activities on technical efficiency: evidence from maize producers of eastern Ethiopia. Agricultural and Food Economics, 6(3). DOI:
Akinbode, S. O., Dipeolu, A. O. & Ayinde, A. I. (2011). An examination of technical, allocative and economic efficiencies in Ofada rice farming in Ogun State, Nigeria. African Journal of Agricultural Research, 6(28), 6027-6035. DOI: 10.5897/AJAR11.231
Alfred, S. D. Y., & Adekayode, A. B. (2014). Consumers’ attitude towards local rice production and consumption in Ondo state, Nigeria. Journal of Agricultural and Rural Development, 6(7), 242-248.
Ambali, O. I., Adegbite, D. A., Ayinde, I. A. & Awotide D. O. (2012). Analysis of production efficiency of food crop farmers in Ogun State, Nigeria. ARPN Journal of Agricultural and Biological Science, 7(9), 680-688.
Ashaolu, O.F., Afolabi, O.I. & Olaniyi, O.J. (2015). Off-farm income diversification and poverty status of rural farm households in Oyo State, Nigeria. Journal of Agricultural Management and Rural Development, 5 (1), 52-59.
Ayedun, B. & Adeniyi, A. (2019). Efficiency in rice production in Nigeria. Acta scientific nutritional health, 3(7),86-94.
Ayoade, A. R. & Adeola, R. G. (2012), Effects of poverty on rural household welfare in Oyo State, Nigeria. Global Journal of Science Frontier Research. Agriculture and Biology, 12(4), 24-32.
Battese, G.E & Coelli, T. J. (1977). Estimation of a productions frontier model, with application to the pastoral zone of eastern Australian. Australian Journal of Agricultural Economics, 21(3), 169 – 179.
Cameron, A. & Trivedi, P. (2005). Microeconometrics: methods and applications. Cambridge University Press, New York.
Chambers, R. (1983). Editorial introduction: vulnerability, coping and policy. IDS Bull., 2(2), 1-7.
Coelli, T.J. (1995). Recent developments in frontier modeling and efficiency measurement. Aust. J. Agric. Econom, 39, 219-245.
Coelli, T.J., Prasado Rao, D.S. & Battese G.E. (1998). Anintroduction to efficiency and productivity analysis. Kluwer Academic Publishers,Boston/Dordrecht.
Conroy, C. (2005). Participatory livestock research: A Guide. ITDG Publishing, London.
Fasoyiro, S. B., & Taiwo, K. A. (2012). Strategies for increasing food production and food security in Nigeria. Journal of Agricultural & Food Information, 13(4), 338-355.
Gautam, M., Nagarajan, H., & Pradhan K. (2012) Technical, economic and allocative efficiency and its determinants of Indian agricultural farmers using ARIS/REDS panel data. NCAER Working Papers on Decentralisation and Rural Governance in India. National Council of Applied Economic Research, India.
Gela A., Haji J., Ketema M., & Abate H. (2019). Technical, allocative and economic efficiencies of small-scale sesame farmers: the case of west Gondar zone, Ethiopia. Review of Agricultural and Applied Economics, (2), 10-17, http// doi: 10.15414/raae.2019.22.02.10.
Ismail, A. M., Johnson, D. E., Ella, E. S., Vergara, G. V., & Baltazar, A. M. (2012). Adaptation to flooding during emergence and seedling growth in rice and weeds, and implications for crop establishment. AoB PLANTS pls019; doi:10.1093/aobpla/pls019, Retrieved on 18th November, 2012 from http://aobpla.oxford
Jondrow, J. C., Lovell, A.K., Masterov I., & Schmidt, P. (1982). On the Estimation of technical efficiency in stochastic frontier production model. Journal of Econometrics, 19 (3) , 233-238.
Kamau, M., Burger, K., Giller, K., & Kuyvenhoven, A. (2009). Labor markets and labor allocative efficiency among farm households in western Kenya. African Journal of Agriculture and Resource Economics, 3(2), 144–158.
Maclean, J., Hardy, M. & Hettel, G. (2013). Rice Almanac. 4th ed. Philippines: Global Rice Science Partnership. p283.
Nyagaka, D. O., Obare, G. A., Omiti, J.M., & Ngoyo, W. (2010). Technical efficiency in resource use: evidence from smallholder irish potato farmers in Nyandaura North District, Kenya. Africa Journal of Agricultural Research, 5(11), 1179-1186.
Ogunsumi, L. O, Ajayi, A., Amire, C. M., & Williams, S. (2013). Sustainability of agricultural transformation agenda. the place of rice farmers in Ogun state Nigeria. Research on Humanities and Social Sciences, 3(13), 66-78.
Okello M. D., Bonabana-Wabb, J., & Mugonola, B. (2019) Farm level allocative efficiency of rice production in Gulu and Amuru districts, Northern Uganda. Agricultural and Food Economics, 7(19),
Olawale S. (2018). Nigeria poverty statistics and poverty rate in Nigeria. Retrived August 23, from http//
Osabohien, E., Okorie, U. & Osabohien, R. (2018). Rice production and processing in Ogun State, Nigeria: qualitative insights from farmers’ association. In E. Obayelu, (Ed.), Food systems sustainability and environmental policies in modern economics (pp. 188-215). Hershey, PA: IGI Global. DOI: 10.4018/978-1-5225-3631-4.ch009.
Price waterhouse Coopers (2018). Boosting rice production through increased mechanization, Nigeria.
Ricepedia (Global Rice Science Partnership) (2010). The global staple. Retrieved January 16, 2018, from
Shittu A (2014). Off-farm labour supply and production efficiency of farm household in rural Southwest Nigeria. Agricultural and Food Economics 2(4) Tobin, J. (1958) Estimation of Relationships for Limited Dependent Variables. Econometrica, 26(1), 24-36.
Tung, D. (2013). Changes in the technical and scale efficiency of rice production activities in the Mekong delta, Vietnam. Agricultural and Food Economics, 1(16)
Valdés, A., Foster, W. (2010). Reflections on the role of agriculture in pro-poor growth. World Development, 38(10), 1362–1374.
Wooldridge, J. (2002). Econometric analysis of cross section and panel data. The MIT Press, London.
World Bank (1993). World Development Report: Investing in Health. Oxford University Press, New York.
World Bank (2007) World development report 2008: agriculture for development. The World Bank, Washington, DC.

Published : 2020-12-29

Aboaba, K. (2020). Economic Efficiency of Rice Farming:. Journal of Agribusiness and Rural Development, 58(4), 423–435.

Kazeem Aboaba
Federal university of Agriculture, Abeokuta  Nigeria

CitedBy Crossref

CitedBy Scopus

HTML tutorial

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

This journal permits and encourages authors to post items submitted to the journal on personal websites or institutional repositories both prior to and after publication, while providing bibliographic details that credit, if applicable, its publication in this journal.