An Examination of Profit Inefficiency of Rice Farmers in Northern Ghana

This paper employs a stochastic frontier model to examine profit inefficiency of rice farmers in the Northern Region of Ghana using farm-level survey data. The efficiency index, based on a half-normal distribution of the stochastic error term is related to farm and household characteristics. The empirical results show that farmers\u27 human capitalrepresented by the level of schooling contributes positively to production efficiency, suggesting that investment in farmers\u27 education improves their allocative performance. Access to credit and greater specialization in rice production, are found to be positively related to production efficiency. A farmer\u27s participation in nonfarm employment and being older, however, reduce production efficiency. Farmers located in areas with better facilities like extension services and agricultural input delivery systems also tend to exhibit greaterproduction efficienc