Abstract:
Rice is staple food in Liberia and therefore self-sufficiency in rice production remains a major concern. However, Liberia is experiencing insufficiency in rice production due to high production cost and low national average output of 1.2 t/ha, which is significantly low as compared to other West African countries. This has resulted in the increased importation of rice in the country consequently taking significant portion of the nation’s foreign exchange. Rice production and supply is sensitive to profitability. Improving profitability provides incentives to increase production and marketable surplus; thereby helping Liberia bridge the gap between supply and demand. The best and most effective way to improve productivity is through more efficient utilisation of scare resources. This study was conducted to analyse profit efficiency among smallholder rice farmers in Bien Garr and Panta Districts, Central Liberia. Specifically, it focused on analysing profit efficiency and sources of inefficiency. Data were collected from 400 smallholder rice farmers using two stage random sampling with stratification.Translog profit function was fitted to the data to generate results. The findings revealed that labour cost represented the highest percentage of cost structure for all farmers varying from 73-92%. Lowland farmers were more profitable than upland farmers. Factors that distinguish significant difference between low profit farmers and high profit farmers were level of rice farming experience, access to credit and extension services, membership to farmers group, rice variety cultivated, use of fertiliser, use of herbicide and agroecology (P<0.05). It was also found that smallholder rice farmers were not operating at full profit efficiency level. Profit efficiency level varies among the farmers ranging from 13% to 93%, with mean efficiency level of 67%. To operate as the best efficient farmers in the study area, on average, the sample rice farmers would need to reduce their costs by approximately 28%. Inefficiency in rice production was significantly influenced by farming experience, household size, access to credit and extension services, membership to farmers group and market information access (P<0.05). From these results, it clear that improvement in profit efficiency would require the use of yield improving technologies. Also, there should be programs with focus on increase access to credit and extension services. Lastly, farmers should be encouraged to join or form association which may bring benefits to them.
