EFFECTS OF OFF-FARM WORK ON TECHNICAL EFFICIENCY AND PRODUCTION RISK AMONG RICE FARMERS IN ENUGU STATE, NIGERIA.
ABSTRACT
The study analysed the effects of off-farm work on technical efficiency and production risks among rice farmers in Enugu State, Nigeria. Ninety respondents were selected using multi-stage sampling technique. Data for the study were collected by the use of well structured questionnaire. Descriptive statistics and stochastic production frontier model were used to analyse the data. Results showed that the two groups of rice farmers had similar socio-economic characteristics. Technical efficiency scores for the farmers ranged from 0.579 to 1.000 and 0.0606 to 1.000 for the rice farmers without and with off-farm work respectively. The average efficiencies are 0.964 and 0.871 for rice farmers without and with off-farm work, respectively. This suggests that off-farm work has a negative effect on farmers’ technical efficiency. The result of the student t-test conducted at 5% significance level showed that there is a significant difference in the mean technical efficiency of the two groups of rice farmers. For rice farmers without off-farm work average number of farmers associations (0.646), age (0.328), education (3.838) and extension access (3.144) significantly and positively influenced technical inefficiency effects while for their counterpart age (0.159) and extension access (4.727) significantly and positively influenced technical inefficiency effects and household size (-0.970) was significant but negative. For farmers without off-farm work, family labour (1.287) has a positive and significant effect on production risk, meaning that family labour is a risk increasing factor. Depreciated value of equipment (-12.255) used has a negative and significant effect on production risk which indicates that investment on equipment will decrease the production risk in rice production. For rice farmers with off-farm work none of the factors was significant even though they all had negative sign. The constraints faced by the farmers were inaccessible road, high cost of transportation, inadequate credit, birds’ invasion, inadequate extension support, inaccessibility to cheap farm inputs ranked in ascending order of importance.