Assessing technical and scale efficiency of groundnut production in Tolon district of northern Ghana: A nonparametric approach

Abstract

The study examined technical and scale efficiency of groundnut farmers in the Guinea Savanna of Ghana using survey data collected in 2018. The study relied on DEA modelling to evaluate the efficiency scores of groundnut farmers under constant and variable returns to scale assumptions while a censored Tobit model was applied to evaluate the determinants of efficiency. Farmers were 70% technically efficient under variable returns to scale assumption and 73% scale efficient. Factors affecting technical efficiency included sex of farmer, farming experience, number of household members, extension contact, participation in off-farm work, and pest and disease incidence, while scale efficiency was influenced by educational status, household size, farmer group membership and farm size. Policies to promote efficiency at the farm level should target the promotion of formal education in rural areas, incentivization of farmer groups to offer beneficial services to members and expansion of extension access to rural farmers.

Keywords

• DEA model
• Scale efficiency
• Technical efficiency
• Tobit model
• Ghana