Stochastic production frontier analysis and technical efficiency of beef Suya producers in Edo State, Nigeria

Abstract

The study applied stochastic production frontier (SPF) analysis to measure the technical efficiency of beef suya producers in Edo State,  Nigeria. Specifically, it described the socio-economic characteristics of beef Suya producers, estimated the maximum likelihood function  of the SPF of beef suya production, determined the technical efficiency (TE) of beef suya producers, and examined the determinants of  technical inefficiency (TIE) of the suya producers in the study area. A multi-stage sampling procedure that combined purposive and  random sampling techniques was employed to sample 277 respondents from the sample frame of 900 beef Suya producers for the study.  However, 255 beef producers provided useful information for analysis, which was done using descriptive statistics, SPF and TIE  model. The maximum likelihood estimates of the SPF showed that labour, fresh beef and ingredients positively and significantly  influenced the output of beef suya. The log-likelihood ratio test indicated the significant (p<0.01) presence of inefficiency parameters in  the SPF model used, thus, justifying its application in the analysis. About 22% of the variation in output of the beef suya was due to TIEs of  the suya producers, and their mean technical efficiency was 72%. On determinants of the producers’ technical inefficiencies, age,  experience and level of involvement in suya production negatively influenced their TIE while household size positively influenced their  TIE. The study concluded that there was still room for increasing the TE of the suya producers by 28% through improvement in the use of inputs and level of their socio-economic characteristics, which are the determinants of the producers’ inefficiency. It was recommended  that the beef suya producers should be trained on efficient production process to further improve their technical efficiency.