CHAPTER ONE

INTRODUTION

            Background

“The importance of the agricultural sector in developing countries cannot be underestimated” (Yaro, 2013). Agricultural growth will be crucial for enhancing the livelihood of most of Africa’s poor. Most of Africa’s poor living in rural areas and urban areas will greatly depend on expanding agrarian profitability to raise their standard of living (Shan et al, 1997; World Bank, 2000). The African agricultural sector produces an average of 74% of its potential yield with the available technology (Nkamleu et al., 2006). According to the Ministry of Food and Agriculture (MoFA, 2008), the agricultural sector is the backbone of the social and economic development of Ghana. The agricultural sector used to be the highest contributor to gross domestic product until the recent onset of oil production in Ghana. Agriculture in Ghana accounts for 19% of GDP (MoFA, 2011) and 75% of foreign exchange. “Most outputs of agricultural crops in Ghana are 20-60% below their achievable level” (Abdulai et al., 2013).

The Maize crop (zea mays) is very essential to Ghana’s food security and also promotes the increase in farmers’ incomes via their engagement in its cultivation (Kuwornu et al, 2013). Maize is an important component for human diet and livestock feed in Ghana and also serves as a cash crop, hence ensuring improved production will enhance self- sufficiency among households (Wiredu et al, 2010). The sale of maize also provides a source of income which helps improve the standard of living of maize producers in the different ecological zones in Ghana. Maize is the leading crop with regards to cropped area, accounting for about 50% of national cereal production according to the Millennium

Development Authority (MiDA, 2010). The total cropped area for maize in the 2016 production year was 865,281 hectares according to Statistical Research and Information Directorate of MoFA (SRID, 2017). According to MiDA (2010), “after cocoa maize is the second largest commodity crop in the country and is most important crop for Ghana’s agricultural sector”. Maize is a major component of poultry feed and is highly demanded by poultry feed manufacturers (Ravindran, 2012).

According to SRID (2017) “the yield of 1.9 Mt/ha for maize is less than a third of the potential yield of 6.0 Mt/ha”. Increased agricultural growth needs to be propelled by enhanced productivity rather than land expansion (Nkamleu et al., 2006). “The total harvested area for maize increased by 45% between 1970 and 2009 with an average cropped area of 930,000 ha per year” (SRID/MoFA, 2010). There is potential for growth by increasing productivity in Ghana. This is evident in the gaps that exist between current and potential yields of many crops. “The main cause of low productivity in maize farming include overutilization of unimproved maize seeds, reduction in soil fertility, inconsistent rainfall, pests and disease attacks, little improvement in agronomic practices and limited use of output-increasing inputs like agrochemicals and fertilizers” (Serunkuuma et al., 2001). (Zhou et al., 2010) found that education helps farmers to gain better information about new technologies like new inputs of production and how to use them to increase their output. Other variables that may affect productivity may include competitive pressure and managerial skills (Kumbhakar et al., 2000).

Technical efficiency basically calls attention to the capacity of a producer to maximize yields with a specified group of inputs whereas environment-technology gap refers to the various sets of production processes that are available to producers in different ecological

zones. The aim of Ghana’s Medium Term Agriculture Sector Investment Plan (MoFA, 2010) is to modernize agriculture which will bring about a transformed economy which is food secure, with low poverty and employment rates. The ability of maize farmers in Ghana to increase their yield levels and achieve sustainability in production is dependent on efficient farm practices. Increasing agricultural productivity is essential to poverty reduction and will also help to reduce the cost of production and the prices of food for the poor.

Contrasts in technical efficiency are seen as contrasts in the physical yield created from a given set of physical input sources. Factors such as climate change and natural disasters, poor road networks, inadequate post-harvest technology, rural urban migration, constant increase in demand for land and other factors make it necessary for a nation like Ghana to want to look at its efficiency with regards to agricultural production, particularly food staples such as maize.

            Problem Statement

The aggregate factor productivity in the agricultural sector can be enhanced either by enhancing technical effectiveness and additionally by enhancing innovation levels. “An important inquiry for agricultural policymakers is whether to seek after a technique coordinated towards mechanical change or a methodology towards efficiency change” (Nkamleu et al., 2004). The domestic supply of maize in Ghana is reported to be below the growing demand despite the importance of maize to the Ghanaian economy (MiDA, 2010). The production of maize in Ghana is a primary undertaking of small scale farmers who have limited access to the use of improved seed, fertilizer, other chemical inputs,

mechanization and post-harvest facilities. Ghana continues to observe a decline in production even though the government has made a lot of investments in the sector due to decreasing familiarity with improved technologies.

Constant increases in human populations have led to a substantial increase in demand for arable agricultural land for human settlements in many parts of the country (Jimah, K. 2016). This has created rivalry for the utilization of limited land resources for either agricultural production or real estate development for human settlements and other business activities. In an attempt to increase agricultural outputs, excessive use of chemical inputs degrades the natural environment overtime and eventually renders land used for cultivation infertile and unable to support plant growth. Conventional increases in production outputs are normally attained by an increase in cropped land but this activity is constrained by increasingly scarce land availability. How farmers adapt to these changes and how they will manage to meet the ever growing demand for maize ultimately depends on the efficient use of production resources on the farm.

The existence of shortfalls in the technical efficiency of production implies that yields can be increased without requiring additional conventional inputs and without the need for new innovation. Belbase and Grabowski (1985) realized that attempts to raise efficiency levels as a strategy to increase agricultural output is cheaper than presenting new advances if producers are not streamlining the utilization of existing ones. Temperature, rainfall and other climatic factors that affect maize production differs across the different ecological zones within the country. Certain ecological zones may be more suited to the ideal conditions required for maize production than others. If so, empirical measures of effectiveness are essential so as to decide the extent of the benefit that could be attained by

enhancing performance with an accessible innovation. In the sight of environmental- technology gap, technical progress, is the judicious technique to fundamentally raise the levels of agricultural output (Nkamleu et al, 2006).

It is important to study maize producers to determine their highest yield potential given available technologies and limited land resource, and to identify spatial/geographical differences in order for policies to be tailored to how different parts of the country can improve upon their yield. This study aims to identify and explain the determinants of inefficiencies in production which are not likely to be the same across the different ecological zones. Hence the need for empirical studies that measure and compare technical efficiencies and environmental-technology gaps present in the maize sector in three different ecological zones in Ghana. The specific ecological zones include the savannah zone, the transition zone and the forest zone. This study will give an insight to the elasticity of output with respect to the main inputs of maize production in the three selected ecological zones. The study will also identify the determinants of inefficiency within those ecological zones in order for tailored policies to be directed at addressing the results observed from this study. To the best of available knowledge, no empirical study has addressed this issue. This research seeks to fill the void.

            Research Questions

From the above discussions, this thesis would want to address these questions:

1. What is the elasticity of output with respect to the various inputs in maize production?
   1. What are the levels of technical efficiency across the three ecological zones?

• What are the environmental-technology gap ratios in maize farming in the three selected ecological zones?
  • What are the causes of inefficiency in maize production?

• What are the constraints faced by maize farmers in the three ecological zones?

            Research Objective

The main objective of the study is to comparatively analyze the technical efficiency levels and technology gaps in maize production in selected ecological zones.

The specific objectives are:

1. To estimate the output elasticity with respect to the various input in maize production in the selected study areas.
   1. To estimate the technical efficiency scores for each ecological zone.

• To compute the environmental-technology gap ratios of maize production in the three ecological zones.
  • To identify and explain the causes of inefficiencies in maize production.

• To identify the constraints faced by maize farmers in the three ecological zones

            Relevance of Study

This study seeks to estimate the productivity of input factors to maize output and provides insight about the relationship of the various input factors to output and the extent to which output will change if the input factors are changed. The estimated scale elasticity of production provides an indication of the change in output if all the factor inputs are varied by the same proportion in the long run. The estimates derived help to inform policy on the right input mix which will result in increased output in the three ecological zones.

Identification of factors that improve efficiency is a very important step to give policy recommendations. The identification of existing inefficiencies and constraints will help farmers and all other stakeholders develop strategies targeted at reducing production inefficiency. This study is also aimed at computing the environmental technology gap that exists in the maize sector in the three main ecological zones in Ghana. The standard technical efficiency estimates and environmental technology gap ratios that are estimated with the aid of the Metafrontier model will inform policy makers on how far each ecological zone is from the best practice technology available to the whole maize industry. This will help policy makers design tailored policies for each ecological zone with regards to the kind of training and technology that farmers must adopt and the utilization of the best agricultural practices within each ecological zone.