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Are Farmers “Efficient but Poor”? The Impact of Crop Choices on Agricultural Productivity and Poverty in Nigeria

Author

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  • Chisom Ubabukoh

    (Economics School of Social Science, The University of Manchester, UK and Jindal Global Law School, O. P. Jindal Global University, INDIA)

  • Katsushi S. Imai

    (Department of Economics, The University of Manchester, UK, Research Institute for Economics and Business Administration, Kobe University, JAPAN)

Abstract

This paper aims to test the “efficient-but-poor” hypothesis” by estimating the determinants of smallholders’ choice over cash or food crops and whether their crop choice affects technical efficiency and poverty using the national household panel data in Nigeria. As the crop choice is endogenous in the sense that the farmers’ crop choice is also influenced by resulting revenue from the crop, we carry out stochastic frontier analyses with the Greene (2010) correction for sample selection about farmers’ crop choice and find that smallholders are generally efficient in their resource allocations. A treatment effects model is employed to estimate farmers’ crop choice in the first stage and the impact of their choices on technical efficiency and poverty outcomes in the second. The results show that farmers’ access to free inputs, non-farm income and the use of seeds from the previous growing season are important determinants of crop choice. The adoption of cash crops by food-crop producing households will not generally reduce poverty, although it will improve technical efficiency marginally. However, if cash crops are commercialised, poverty tends to decline.

Suggested Citation

  • Chisom Ubabukoh & Katsushi S. Imai, 2021. "Are Farmers “Efficient but Poor”? The Impact of Crop Choices on Agricultural Productivity and Poverty in Nigeria," Discussion Paper Series DP2021-17, Research Institute for Economics & Business Administration, Kobe University, revised Jun 2022.
    • Handle: RePEc:kob:dpaper:dp2021-17
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    References listed on IDEAS

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    More about this item

    Keywords

    Technical Efficiency; Poverty; Crop Choice; Stochastic Frontier Analysis; Treatment Effects Model; Nigeria;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • N57 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Africa; Oceania
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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