Technical efficiency and technological change of value chains in five Nigerian states

Value chain development projects focusing on agricultural commercialization have been shown to improve production, income, and assets (Reardon et al., 2009; Barrett et al., 2012). However, the extent to which these types of projects contribute to improved technical efficiency and technological change of small-scale producers participating in value chains is largely understudied. Our country study is Nigeria, where the limited evidence available suggests that productivity gaps in agriculture between men and women are wide, ranging from 17% in the South to 46% in the North (Oseni et al., 2015). Our study focuses on the first phase of the Value Chain Development Programme (VCDP), which was implemented between 2013 and 2019. VCDP worked with farmer organizations to increase productive capacity, productivity, and to foster market-linkages in two commodity-specific value chains: rice and cassava (IFAD, 2012). In our study, we analyse the impacts of VCDP on technical efficiency (TE), technological change (TC), and agricultural productivity of rice and cassava production in Nigeria. Further, we investigate whether the effects on the various performance indicators vary significantly between male and female farmers. Our dataset comes from a survey of 1,784 (879 treated and 905 control) households conducted during February and March 2020 in five states -Anambra, Benue, Ebonyi, Niger, and Ogun- with distinct cultural and gender norms. We use a combination of propensity score matching with a stochastic production frontier model to correct for selection bias (SC-SPF) (Greene, 2010; Bravo-Ureta et al., 2012). First, we pre-process the dataset to ensure that treatment and control households are observationally and statistically comparable, with an adequate common support along their socio-demographic, economic and agricultural characteristics (Ho et al., 2007). Then, we explore the impact of VCDP on two key productivity components: TC -proxied by a shift in the production frontier-, and TE -which captures managerial performance-. These two productivity-related elements are the basis for testing performance differences between treatment and control households (Greene, 2010; Bravo-Ureta et al., 2012). We then analyse frontier output, TE, and technology gaps using a stochastic meta-frontier (SMF) framework, which provides the common benchmark required for valid comparisons (Huang et al., 2014; Amsler et al., 2017). Preliminary results indicate that treated and control households are statistically comparable based on a number of observable pre-intervention characteristics. Project impact estimates indicate that VCDP lead to higher rice productivity, while no significant impact is detected for cassava. Our study makes two key contributions to the literature. First, our focus is estimating the extent to which value chain projects could potentially alter underlying factors driving gender gaps in agricultural productivity by using a different methodological approach that would allow direct comparison of gender-specific TC and TE (Owusu and Bravo-Ureta, 2020). Second, our study complements the small -though increasing- number of studies that extend the SC-SPF methodology under the SMF framework to compare TE levels across treated and control groups using a common benchmark (Villano et al., 2015; Bravo-Ureta et al., 2020; Olagunju et al., 2021). In addition, findings from this study generate evidence potentially helpful for both future project design and agricultural policy in Nigeria. Since 2011, the Federal Government of Nigeria has prioritized investments in the development of the country’s agricultural sector with the aim of addressing low productivity, limited private sector investment, human capacity constraints, weak value chains, and untapped opportunities for value addition (Babu et al., 2014). We expect our findings to be directly relevant in the design of future gender-sensitive agricultural investments in value chains.