Journal of Agricultural Economics, Extension and Rural Development

ISSN 2360-798X

Application of stochastic frontier function in measuring profit efficiency of small-scale maize farmers in Niger State, Nigeria


Accepted 3rd January, 2015


The study employed Cobb-Douglas stochastic profit frontier function to measure profit efficiency among maize farmers’ in Niger State, Nigeria. A multistage sampling technique was used to select 120 respondents. The results showed that profit efficiencies of the farmers varied widely between 12% and 95% with a mean of 71%. The mean level of efficiency indicates that there exists room to increase profit by improving the technical and allocative efficiency. Least profit efficient farmer needs an efficiency gain of 87% to attain the profit efficiency of the best farmer in the region, an average efficient farmer need an efficiency gain of 25% to attain the level of the most profit efficient farmer, while the most profit efficient farmer needs about 5% gains in profit efficiency to be on the frontier. All the parameters included in the inefficiency model have significant impacts on profit efficiency. This implies that profit inefficiency in maize production can be reduced significantly with improvement in the level of education of sampled farmers.


Keywords: Profit efficiency, factors explaining inefficiency, profit loss, Maize farmers, Small-scale, Nigeria