Measuring the Efficiency of Selected Quoted Agricultural Firms in Nigeria: Data Envelopment Analysis (DEA) Approach

Abstract

This paper uses the data envelopment analysis (DEA) to examine production and technical efficiency of five (5) selected agricultural firms in Nigeria. This is examined over the period 2004-2017. The empirical results revealed a technical efficiency score of 88.0 %. Large number of the firms are also found to be scale inefficient, apparently due to managerial incompetence. The decomposition of the firms in terms of return to scale further show that 40% of the sampled agricultural firms operate under conditions of constant return to scale, while 60% operate under increasing returns to scale, with one (1) of the sampled firms operating under conditions of the most productive scale size. We therefore recommend that policies should be instituted to stimulate farm agricultural technology and utilization, as well as appropriate macroeconomic policy environment that will steer technical and productive efficiency in the agriculture sector in Nigeria, particularly in enhancing national development.