Technical Efficiency Analysis Of Groundnut Production in Ghana: A Bayesian Approach

ABSTRACT

 Groundnut has been identified as the most important leguminous crop in Ghana both in terms of volume of production and export. Its production has faced numerous challenges over the past decades in Ghana as the productivity of groundnut continues to decline despite the abundant resources that support its growth. The question is, what then is responsible for the declining productivity levels of groundnut in Ghana? The study sought to estimate the productivity levels and technical efficiency levels of groundnut farmers in Ghana as well as analyse the determinants of inefficiencies among the farmers. In a single stage approach, a Bayesian stochastic frontier model was analysed with the translog functional form. Cross-sectional data from three-hundred (300) groundnut farmers sampled across three regions in Ghana were used for the study. A relatively noninformative priors were chosen for the parameters of the models with a prior median efficiency of 0.8. Groundnut farmers were found to be producing at an increasing return to scale of 1.10. Average technical efficiency score of the farmers was found to be 70. 5% which ranges from a minimum of 13% to a maximum of 95.13%. Frequency of extension visit, educational level and gender of the farmers were identified to significantly explain inefficiency of the farmers. The study concludes that groundnut farmers in Ghana are producing at an increasing return to scale and at an average technical efficiency level of 70.5%. Extension visit, educational level and gender were found to be responsible for inefficiencies among groundnut producers. The study therefore recommends increase in scale of production by groundnut farmers, empowering the farmers to produce at an efficient level by districts assemblies and improving upon the extension services and information delivery to enhance farmer learning ability through department of agriculture.