Ladoke Akintola University of Technology, Nigeria
Title: Application of stochastic frontier approach model to assess technical inefficiency effects in Africa’s agricultural production
Kalu U. Ifegwu is currently a PhD student in the Department of Agricultural Economics, Ladoke Akintola University of Technology, Ogbomoso, Nigeria. He holds an M.Tech Masters’ Degree in Agricultural Economics, in addition to a Post Graduate Diploma in Financial Management from Obafemi Awolowo University, Ile-Ife, Nigeria. He presented a paper on “Hedonic Analysis of Consumer Preference in the Choice of Cowpea in Nigeria” at an international conference in South Africa in 2011. The same paper has been accepted by a reputed journal for publication. He has more than 5 papers awaiting presentations and subsequent publication.
The objective of this study is to apply the Stochas¬tic Frontier Analysis technique in order to asses technical inefficiency effects in Africa’s agricultural production through time. The Stochastic Frontier Analysis (SFA) is an analyti¬cal approach that utilizes econometric (parametric) techniques whose models of production recognize technical inefficiency and the fact that random shocks beyond producers’ control may affect the output. The inefficiency model, in which the efficiency differences are simultaneously estimated from the stochastic frontier and explained by further variables, incorporating tests that choose between functional forms and between frontier and traditional models were applied. This approach differs from the normal practice of predicting country-level inefficiencies and then regressing these upon various factors in a second stage of modelling. The data used for the estimation of the production function model were drawn from the Food and Agricultural Organization Statistics (FAOSTAT) of the United Nations for the period 1961-2009 on twenty-six African countries. Variables considered for the inefficiency effects model include annual rainfall and life expectancy rate obtained from the Word Bank Indicators published by the World Bank. The results show that rainfall and life expectancy rate were associated with higher technical efficiency of agricultural production. This suggests that provision of irrigation facilities and improved health services are key factors necessary for policy consideration.