Economic efficiency and productivity effects of rice-based crop diversification: evidence from Nigerian smallholder farmers

Abstract

This study examines the economic performance of rice-based crop diversification among Nigerian smallholders, addressing a gap in the empirical literature, which often highlights diversification benefits without assessing its direct impact on production efficiency. A stochastic frontier production function was used to estimate output elasticities, input contributions, technical efficiency and scale elasticity in diversified rice-based farming systems. The analysis also assesses how farmer and household characteristics influence efficiency. Rice is the most responsive output in the diversification system, with an elasticity of 0.574. Fertiliser has the strongest positive effect on input efficiency, followed by hired labour, pesticides, cultivation costs, farm assets, seed costs and family labour. Average technical efficiency is 0.68. Diversification, farmer age and family size and family size are associated with lower efficiency, whereas education, marital status and income are associated with higher efficiency. A scale elasticity of 0.896 indicates increasing returns to scale in diversified rice production. The findings provide robust empirical evidence on the efficiency implications of diversification in rice-based systems and underscore the importance of demographic and institutional factors in shaping farm-level performance. This study provides empirical evaluations of the relationship between rice-based crop diversification and economic performance using a stochastic frontier framework, offering evidence-based insights to improve efficiency and support the scaling-up of diversified farming systems in Nigeria.