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

Chisom Ubabukoh and Katsushi Imai
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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

No DP2021-17, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

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.

Keywords: Technical Efficiency; Poverty; Crop Choice; Stochastic Frontier Analysis; Treatment Effects Model; Nigeria (search for similar items in EconPapers)
JEL-codes: D24 I32 N57 O13 O33 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2021-09, Revised 2022-06
New Economics Papers: this item is included in nep-dev, nep-eff and nep-isf
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https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2021-17.pdf First version, 2021 (application/pdf)

Related works:
Working Paper: Are Farmers "Efficient but Poor"? The Impact of Crop Choices on Agricultural Productivity and Poverty in Nigeria (2021)
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