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

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.