Are all farmers technically inefficient? Evidence from smallholder rice producers in Ghana

This study applied the zero-inefficiency stochastic frontier (ZISF) to analyse the technical efficiency of 333 improved rice-farming households for the 2012/2013 farming season in Ghana. The ZISF accommodates fully efficient rice farms alongside technically inefficient farms under a common production technology. The results revealed that 39% of rice farms were fully technically efficient, with zero inefficiency within a common production frontier. The mean technical efficiency estimate amongst the inefficient farms was 67.8%, implying that these rice farms could increase their output by 32% without changing the levels of inputs used, if they improved their efficiency and operated on the production frontier. There were increasing returns to scale (1.65), with farm size, seed, labour and fertiliser having a positive effect on rice output. Similarly, controlling rice field water levels through levelling and bunding, and weeding the rice field at least two times during the production season, increased technical efficiency. The study recommends cultivation of improved rice varieties, fertiliser application, expanding acreage and easing labour constraints to increase rice output, together with weeding and managing plot water levels to improve efficiency in rice production. Specifically, Ghana’s ‘Planting for Food and Jobs’ programme should expand access to improved rice varieties, fertiliser use, agricultural mechanisation services and other labour-saving technologies to enhance rice output. In addition, the agricultural extension service should be well resourced to disseminate best practices in rice cultivation to farmers.