COST EFFICIENCY OF PIPER GUINEENSIS PRODUCTION IN SELECTED LOCAL GOVERNMENT AREAS OF KOGI STATE, NIGERIA

Abstract

This study examined the Cost Efficiency of Piper guineensis Production in Selected Local Government Area of Kogi State, Nigeria. Descriptive statistics and stochastic frontier production function were used to analyze the primary data collected with the aid of a structured questionnaire. The Results revealed that the estimates sigma squared (σ2) and Gamma (ϒ) for the cost function was 0.052 and 0.066 and are both statistically significant at 1% level respectively. Cost of labour, seed, manure, fertilizer and agrochemicals were positively significant at 1% probability level, meaning that these factors are significantly different from zero and thus are important in Piper guineensis production. This implies that a 1% increase in the cost of any of these factors will increase total cost by 0. 209, 0.163, 0.066, 0.084 and 0. 118 respectively. Among the various factors affecting inefficiency, marital status, household size, age and access to credit were significant. The marital status of a Piper guineensis farmer can reduce cost inefficiency therefore increasing the cost efficiency of the farmer. An increase in the household size do not play any significant role in reducing the cost inefficiency of Piper guineensis farmers as most Piper guineensis farmers depend on hired labour for their farm practice. However, older farmers are more efficient in Piper guineensis production than younger farmers are while those who have access to credit are more efficient in Piper guineensis production. The cost efficient level of Piper guineensis farmers ranges from 0.51 to 1.00 indicating that all the sampled Piper guineensis farmers in the study area are cost efficient. The Government should also make sure that Piper guineensis farmers get easy access to credit at the right time.