A Comparative Analysis of Profit Efficiency in Maize and Cowpea Production in the Ejura Sekyedumase District of the Ashanti Region, Ghana

Abstract

Resource allocation influences productivity or profitability of crop enterprises, particularly
among smallholder agricultural systems, yet many empirical studies tend to ignore this fact.
In this paper, we use profit efficiency measurement as a proxy for comparative advantage to
decide the crop for specialization in the Ejura-Sekyedumase District in the Ashanti Region of
Ghana. Using farm level data from 199 respondents who cultivate maize and cowpea, we
employ the stochastic frontier function to measure and compare the profit efficiencies of
farmers cultivating the two crops. Results from the analysis showed that the profit efficiency
of maize farmers ranges between 47% and 96.7% while that of cowpea farmers ranges
between 50.3% and 100% with mean profit efficiencies of 89% and 95% for maize and
cowpea respectively. The study further showed that education, farm size and on-farm labour
participation were major significant factors which influences profit efficiency in the study
area. Farmers in Ejura-Sekyedumase stand to gain improvements in household welfare if
available land and other scarce resources are allocated to cowpea agribusiness.