Full Length Research
Economic efficiency of organic
and peri-urban fadama
agriculture in southwestern,
Nigeria: A stochastic frontier
approach
Adeyemi Ayotunde
Adewale
Abstract
OAs part of the major effort
to improving the food
situation and livelihood of
the Nigerians particularly
the city dwellers as more
than half of the poor people
in developing countries
including Nigeria live in
urban areas (UNDP, 2003). A
study was conducted on the
economic efficiency of small
scale organic and peri-urban
fadama farmers in Nigeria.
Data were collected from 480
organic and peri-urban
fadama farmers selected
using multi-stage sampling
technique and analysed using
budgetary technique,
stochastic frontier
production and cost function
models. The result of the
budgetary technique shows
that the average revenue and
profit generated by peri-urban
fadama farmers in the study
area were N105,897.86 and
N39,342.24 respectively. The
return to scale (RTS) for
the production function
revealed that farmers
operated in the irrational
zone (stage 1) of the
production surface having
RTS of 1.135. The mean
technical, allocative and
economic efficiency of 88.3,
72.1 and 61.4 percent
respectively were obtained
from the data analysis,
indicating that the sampled
farmers were relatively
technically efficient in
their resource use. The
results of the analysis
indicate that presence of
technical and allocative
efficiencies had effects in
peri-urban fadama crop
production as depicted by
the significant gamma
coefficient of the model,
generalized likelihood ratio
test, predicted technical
and allocative efficiencies
within the farmers.
Key words: Peri-urban
fadama farmers, budgetary
technique, efficiency,
stochastic frontier
production and cost
functions.
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