World Aquaculture 19 of feed used, 893 hours of labor, 14,100 fingerlings stocked and N28,485.56 costs of materials. Resource-use efficiency of the inputs Presented in Table 1 are the results of the point estimates of input elasticities of the farms across the states. All the estimated coefficients had positive signs that were significantly different from zero. The implication of this is that the production functions monotonically increased with input level for the farms across the states. The returns to scale (RTS) computed as the summation of the input elasticities, show that a joint increase in the inputs by one percent increased the output by 0.88 percent, 1.33 percent, 1.15 percent and 0.92 percent for farms in Ekiti, Ogun, Ondo and Osun, respectively. This implies that farms in Ogun and Ondo states exhibited increasing returns to scale, while farms in Ekiti and Osun exhibited decreasing returns to scale. The results of the input specific allocative efficiency show that none of the farms across the states appeared to have efficiently allocated any of the variable inputs considered ( ) x x MVP MFC = . The results revealed that 90, 85, 60 and 70 percent of the farms in Ogun, Ondo, Ekiti, and Osun states, respectively, appeared to have underfed. At the same time 70, 78, 65, and 68 percent of the farms in Ogun, Ondo, Ekiti, and Osun states, respectively, appeared to have understocked their fingerlings. Ninety-three, 70, 88 and 55 percent of the farms in Ogun, Ondo, Ekiti, and Osun states, respectively, appeared to have over-used labor. The economic implication of the results was that increased use of feeds, as well as numbers of fingerlings stocked for Table 1. Estimates of the stochastic frontier production function. Variables Parameters Frontier ML estimates Ogun Ondo Ekiti Osun Constant β0 2.614*(3.95) 5.039*(2.49) 4.115*(3.74) 1.851**(1.98) ℓn Pond Size β1 0.149**(2.17) 0.267**(1.98) 0.223*(2.79) 0.311*(3.64) ℓn Feeds β2 0.368**(1.97) 0.295**(2.26) 0.187**(2.02) 0.209**(2.12) ℓn Labor β3 0.123*(2.54) 0.169*(6.31) 0.149**(1.99) 0.003*(3.82) ℓn fingerlings stocks β4 0.305*(1.96) 0.297*(2.75) 0.283**(2.36) 0.146**(2.38) ℓn costs of capital β5 0.387*(5.93) 0.124**(1.97) 0.142*(3.28) 0.252**(2.04) Variance Parameters Sigma square σ2 0.445*(3.46) 0.319*(8.35) 0.523*(3.96) 0.464*(3.09) Gamma γ 0.821*(5.85) 0.803*(3.07) 0.941*(6.24) 0.894**(2.36) Log likelihood LL -47.954 -68.251 -60.298 -55.892 Returns-to-scale (RTS) 1.332** (2.49) 1.153*(5.07) 0.882*(2.86) 0.921*(3.17) Technical Efficiency Minimum 0.581 0.295 0.246 0.127 Maximum 0.982 0.927 0.811 0.763 Average 0.892 0.816 0.784 0.565 Standard Deviation 0.013 0.028 0.017 0.035 Figures in parentheses are t-ratio; * and ** estimates are significant at least 1% and 5% level of significance respectively farms across the states will increase the output level of the farms. At the same time decreased use of labor will increase the farms output level across the states. However, one possible reason for the observed allocative inefficiency across the farms can be attributed to financial constraints. This observation was pointed out to us by the farmers from the study areas as one of the most frequently identified problems. That observation was similar to the findings of Liefert (2005) in his study of allocative efficiency of material inputs in Russian agriculture. He stressed the major influence of credit constraint on optimal input utilization and concluded that improving access of the farmers to credit would improve allocation of resources. Another reason can be attributed to the availability of the inputs. The most affected of all the inputs considered for the analysis is number of fingerlings stocked. Except in Ogun and Ondo states, where there were numbers of hatcheries, other states have few and partially functioning hatcheries. Most hatcheries in Ogun state are privately owned, while most hatcheries in Ondo state were government owned. Farms in Osun state relied on hatcheries from their neighboring states, Oyo and Ogun, while farms in Ekiti relied on hatcheries in Ondo and Oyo. With hatcheries in Ogun and Ondo states supplying farms in their states and farms in the neighboring states, demand seems to outstrip the supply. That issue needs to be addressed. The farmers identified the fingerling supply as another important factor threatening their expansion across the region. (Continued on page 69)
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