Farm Management Dividends in a Friendly Policy Environment: The Case of Cassava Industry in Nigeria

Following the radical reorientation of agricultural policy during the SAP years, beginning in the mid-1980's, cassava emerged as an important crop in the national effort to replace imported foods with domestic production. The policy direction of the Nigerian government has encouraged cassava development leading to a new orientation in research-extension-farmers linkage, especially in the IFAD-assisted Cassava Multiplication Programme (CMP). This study evaluated farm management dividends in a friendly policy environment: the case of cassava industry in Nigeria. Data were collected from randomly sampled 360 cassava farmers in Benue State, Nigeria using a structured questionnaire. The data were analyzed using the stochastic frontier production function. The findings of the study indicated that the elasticity of mean value of cassava output with respect to farm size (1.39) was of increasing function while labour cost (0.19), family labour (0.90), cassava stems (0.95) and fertilized (0.01) were of decreasing function. Moreover, the coefficients on the variables: labour cost, X1(-0.19), farm size, X3 (1.39), cassava stems, X4 (0.95) and fertilizer, X5 (0.01) were statistically significant at the 1% level while family labour,X2 (-0.09) was not significant. The sum of the coefficients on the significant variables of the stochastic frontier production model (2.63) was higher than unity. The estimated coefficient of cassava variety planted (-0.18) and the estimated coefficient of processing technology available (-0.1) were negative and significant at 1% level, suggesting that technical inefficiency effects declined with the planting of improved cassava varieties and the use of improved cassava processing technology. The estimated sigma squared, á2 (0.16), was significantly different from zero at 1% level. This indicates a good fit and the correctness of the specified distributional assumption of the composite error term. In addition the magnitude of the variance ratio, was estimated to be high at 0.96, suggesting that the systematic influences that are unexplained by the production function are the dominant sources of errors. Thus, given the specifications of the Cobb-Douglas frontier production function, the Cobb-Douglas frontier is an adequate representation of the model for the farm data collected on the cassava farmers in Benue State of Nigeria. Majority of the respondents (63.61%) operated closer to their frontier production function while predicted technical efficiencies varied widely among farms, ranging between 31% and 100%, and a mean technical efficiency of 89%. It is recommended that adequate financial assistance and credit facilities should be made available to the farmers to enable them increase their production. Since there are potentials for cassava growth in the study area, the cassava farmers in Benue State should expand their production because they would obtain more output in the long run. Technical efficiency in cassava production in Benue State could be increased through better use of available resources via improved farm-specific factors, which include access to improved cassava planting material, access to improved cassava processing technology, access to available cassava markets and access to improved extension services.