ESTIMATING TECHNICAL EFFICIENCY OF COTTON PRODUCTION IN YENDI MUNICIPALITY, NORTHERN GHANA

Abstract

Agriculture remains the kin pin of most African economies, including Ghana. In recent times the contribution of non-traditional export crops, including cotton, to foreign exchange earnings in Ghana has been quite significant. The aim of this study was to explore the social, economic and environmental factors influencing cotton production in Yendi Municipality in Northern Ghana. A multi-stage sampling technique was used to select 91 small holder cotton farmers in 8 communities in the Municipality. The data was collected during the 2011/12 cropping season and fitted into Translog stochastic frontier model. The one-stage maximum likelihood estimation was used to obtain the efficiency levels as well as the determinants of such efficiency levels. A SWOT analysis was carried out to assess the sustainability or otherwise of the cotton industry in the study area. Individual farm level technical efficiency ranged between 0.70 and 0.99 with a mean of 0.88. This was as a result of the agricultural intensification system made possible by the cotton company, Armajaro Ghana Ltd. However, in order to reap the full benefits of commercializing cotton production in the region, both farmers and the cotton companies must keep to their contractual agreement; while the latter should supply the inputs timely and pay the farmers promptly, the former should use the inputs for the intended purposes and pay back promptly. Above all, there should be land reforms to make land available for the expansion of cotton farms.