Profit Efficiency of Maize (Zea mays L.) Production in Hong Local Government Area of Adamawa State, Nigeria

Abstract

The study analysed the profit efficiency of maize production in Hong Local Government Area of Adamawa State, Nigeria. Multi-stage sampling procedure was employed to select 216 maize farmers. Primary data were generated using questionnaire for 2021 production year and analysed using descriptive statistics, gross margin and stochastic frontier profit model. The finding shows that 58.80% of the respondents were between the age bracket of 21–40 years and 77.31% were male, 86.11% attended formal school having an average of 14.94years farming experience, cultivated a mean of 1.89ha of land. Also, 73.60% inherited their farm land, having an average of 8 persons per household with no access to credit (65.74%). The cost and return analysis revealed a gross margin of N371,417.59 per hectare, which implies that maize production was a viable business in the study area. The Maximum Likelihood estimate of the stochastic profit function revealed 77.16% variations of the actual profit from the frontier profit as a result of the differences in efficiency levels among maize producers. The minimum and maximum profit efficiency indices were 0.65 and 0.99 respectively with mean profit efficiency of 0.89 which implies that farmers were able to obtain 89% of their potential profit from a unit mix of inputs. Cost of hired land, cost of seeds, cost of fertilizer, cost of agrochemicals and cost of labour were found to be the determinants of profit efficiency. The analysis of profit inefficiency effect showed that age (0.0029), education (-0.0196), experience (- 0.4699), household size (0.1674) and access to credit (-0.0430) influences profit inefficiency. The signs and significance of the estimated coefficients in the inefficiency model have important implication on profit efficiency of the producers. It was concluded that maize farmers can be profit efficient if they can access credit to finance their farms as well as acquiring better farm managerial skills. Finally, the study recommends government and non-governmental support in terms of provision of incentive through granting loans and timely supply of subsidized inputs.