THE STRUCTURE AND EFFICIENCY IN RESOURCE USE IN MAIZE PRODUCTION IN THE ASAM&NKESE DISTRICT OF GHANA BX CIURLES YAW CMSI AMANKWAIl A THESIS SUBMITTED TO THE DEPARTMENT OF AGRICULTURAL ECONOMY AND FARM MANAGEMENT, UNIVERSITY OF GHANA, IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE, MASTER OF PHILOSOPHY (M.PIIIL.) IN AGRICULTURAL ECONOMICS DECEMBER, 1996. 354323 DEDICATION dedicate this work to my mum, dad and siblings. DECLARATION I, Charles Yaw Gyasi Amankwah, author of this project report do hereby declare that the work presented in this thesis "THE STRUCTURE AND EFFICIENCY IN RESOURCE USE IN MAIZE PRODUCTION IN THE ASAMANKESE DISTRICT OF GHANA" was done entirely by me in the Department of Agricultural Economy and Farm Management, University of Ghana. This work has never been presented in whole or in part for any other degree of the University or elsewhere. This work has been submitted for examination with my approval as supervisor Charles Xaw Gyasi Amankwah Dr. (Mrs.) R. Al-Hassan (Co-Supervisor)(Principal Supervisor) ii ACKNOWLEDGEMENT I first of all give thanks to the Lord Almighty for successfully seeing me through the completion of this work. The next thanks go to my two supervisors, Dr. G.T-M. Kwadzo, the principal supervisor and Dr. (Mrs.) R. Al-Hassan, the co­ supervisor for their constructive criticisms and immense contributions towards the work. I am in addition very grateful to them especially Dr. G.T-M. Kwadzo for allowing me to use his computer to type and print my work. Thanks also go to my two colleagues, Osei Kwajo and Erasmus at the Computer Science Department who in the course of the work introduced me to the principles and use of the computer and thereafter allowed me to use their computers for my work. My sincere appreciation goes to the Asamankese District Extension Department especially Kennedy, an extension officer who conducted me around the study villages during the administration of the questionnaires. My sincere thanks go to the Emmanuel and Mr. Afare both of Asamankese Post Office who helped me in securing accommodation during the field work. I am also very grateful to my uncle, Mr. W.F. Krofah, managing director of Research and Marketing Services (RMS) for the moral support given me. Finally, I thank Mr. Adika the Librarian, Reindorf, Mr. Amegashie, Mrs. Honu and other members of the department who in diverse ways helped me in my work. Charles Yaw Gyasi Amankwah August 199 8. iii ABSTRACT The study sets out to find out on one hand, the present structure of resources in agricultural production and secondly, to delve deeper into the controversy surrounding the comparative efficiency in resource use by sharecroppers and owner farmers in agricultural production. The approaches used to assess the structure of the resources are frequency distributions, descriptive analyses and estimation of cost composition of individual resources. In assessing the comparative efficiency in the use of resources by sharecroppers and owner farmers, the gross margins method and the allocative efficiency method based on the profit maximizing assumption were used. The findings of the study indicate that, there is limited use of fertilizers, weedicides and improved seeds. Cutlass is widely used. Mixed cropping is widely practiced, land areas cultivated to maize fall mostly below one hectare and the major source of labour on almost all the farms studied is the family. The study also found that there were no significant differences in the efficient use of land and labour by owner and sharecropping farmers. It is therefore concluded that the traditional way of farming based on the structure of the resources has not changed in the study district. With the efficiency in the use of land and labour by sharecroppers and owner farmers, the conclusion is that both farmer groups use land and labour inefficiently. iv CONTENTS CHAPTER ONE PAGE 1.0 Introduction ....................................... 1 1.1 Background Statement ............................... 1 1.2 objectives of the Study ........................... 6 1.3 Relevance of the Study ............................. 6 1.4 Study Area ....................... 8 1.5 Limitation of the Study ............................ 10 1.6 Organization of the Study ......................... 10 CHAPTER TWO 2.0 Literature Review .................................. 13 2.1 Introduction ........................................ 13 2.2 Concept of Structure ............................... 14 2.2.1 Labour Structure ............................. 17 2.2.1.1 Pattern of Labour Use in Ghana ................. 21 2.2.2 Capital Structure ............................. 23 2.2.2.1 Pattern of Capital Use in Agricultural Production in Ghana ........................... 26 2.2.3 Structure of Land ............................. 2 7 2.4 Comparative Efficiency of Tenancy (Sharecropping) and owner-operatorship Systems in Resource Use ............................ 3 0 2.5 Concept of Efficiency .............................. 35 v 2.5.1 Methods of Measuring Resource Use Efficiency . 38 2.5.2 Theoretical frameworks of Analytical Methods . 45 CHAPTER THREE 3.0 Methodology ........................................ 46 3.1 Data and Sampling Technique ....................... 48 3.2 Methods of Analysis ................................ 50 3.2.1 Structure of Resource Use ....... 50 3.2.2 Comparative Efficiency of Resource Use ....... 50 3.2.2.1 Gross margins .................................. 51 3.2.2.2 Allocative Efficiency ......................... 52 CHAPTER FOUR 4.0 Results and discussion....... 56 4.1 Introduction ....................................... 56 4.2 structure of the Resources (as defined by their composition) ................................. 56 4.2.1 Land Structure ................................. 56 4.2.1.1 Farm Sizes ..................................... 56 4.2.1.2 Cropping Pattern ............................... 58 4.2.1.3 Bush Fallow .................................... 61 4.2.1.4 Land Tenure System in the Area ................ 63 4.2. Labour Structure ................................... 65 4.2.2.1 Size of Labour Force ........ 66 4.2.2.2 Distribution of Type of Labour by Task: ....... 71 vi 4.2.2.3 Age and Gender Distribution of Farm House holds .................................... 73 4.2.3 Structure of Capital .......................... 74 4.2.3.1 Types of Capital Inputs ....................... 74 4.3 Structure of Resources in Terms of Proportions .................................... 77 4.4 Resource Use Efficiency....................... 82 4.4.1 Gross Margins Results ......................... 82 4.4.2 Allocative Efficiency ......................... 85 CHAPTER FIVE 5.0 Sumnary, Conclusions and Recommendations .......... 91 vii LIST OF TABLES Table 1 Distribution of Land Sizes Cultivated to only Maize in the 1994 Major Season ............. 57 Table 2 Distribution of Farmers by type of crop mixtures ....................................... 59 Table 3 Farmers' Reasons For Adopting Particular Cropping Pattern .... '......................... 60 Table 4 Distribution of Farmers by Reason for Practising or not Practising Bush Fallow .... 62 Table 5 Distribution of fallow periods ................ 63 Table 6 Distribution of Farmers by type of tenurial arrangement .................. ...... 64 Table 7 Percentage Distribution of Farmers by Type of Tenure and Source of Land Acquisition Percentage ..................................... 65 Table 8 Type of Labour Used on the Farms Studied ..... 63 Table 9 Average Labour Supply per Hectare and Distribution of Hired and Family Labour Supply per Hectare on Mixed and Monocropped Farms ................... 69 Table 10 Percentage of Household Members Engaged in Farming ......................................... 70 Table 11 Distribution of Farmers by Type of Tenurial Arrangement ............................ 72 Table 12 Age and Gender Distribution of Farm households ................................ 73 viii Table 13 Distribution of Farmers' Reasons for not Planting the Improved variety of Maize .......... 75 Table 14 Distribution of Weedicide, Fertilizer and Improved Seeds Used Among Farmers in the Study District ........................... 77 Table 15 Average Total cost per hectare of Inputs Used in Maize Production households ............ 78 Table 16 Average Percentage Share of Inputs in Cost of Production ............................... 79 Table 17 Average Percentage Cost Composition of various Inputs per Hectare Among Farmer Groups ......... 80 Table 18 Average Gross Margins per Labour Input for Farmer Groups ............................... 84 Table 19 Average Gross Margins per Hectare for Farmer Groups ........................................... 85 Table 20 Production elasticities, marginal value products, factor prices and allocative efficiency indices for sharecroppers, owners and the pooled sample 90 ix CHAPTER ONE 1.0 INTRODUCTION 1.1 Background Statement Agricultural production requires the use of resources such as land, labor, capital, as well as managerial skills. These factors are however used in different proportions depending on available technologies. The Structure of resources in an agricultural system refers to either (i) the proportion of each of the resource used in production or (ii) the composition of the resources. Composition of a resource refers to the make of the resource. For example the composition of land refers to the size of land cultivated, type of cropping pattern and the form of land tenure. Composition of labour refers to the size of labour (i.e. number of labour force), types of labour used on farms (i.e. family and hired), age and sex of labour of employment status (i.e. which type of labour does what). The composition of capital refers to the amounts and types of capital inputs employed by farmers in production or the equity- credit ratio of capital (Hill and Hay, 1987). The structure of the resources used gives an idea of the structure of farms or the structure of agriculture in a given nation. The essence of studying the structure of resources is to know the strengths and weaknesses of agricultural production (Rourke, 19 69). Changes in economic conditions, population increases and changing agricultural technologies among other alters the structure of resources in farming which may have implications on output levels (Heady, 1961; OECD, 1975 and Hill and Ray, 1987). In Ghana, there have been changes in the economic environment especially relative prices, increase in the population and changes in agricultural technology which indirectly affect the structure of the resources used and hence output. But there has not been any recent study to document the structure of resources in agricultural production which could form the basis of reference if the above changes are to be examined on the structure of resource use in future. In sub-Saharan Africa, due to rapid population growth and other demands on arable land, there is a strain on agricultural land. This has resulted in a significant reduction in the fallow period and the cultivation of marginal lands. In the absence of sound soil management practices or the economic use of fertilizers and other additives, declining fallow periods result in accelerated depletion of nutrients, increased weed populations, erosion and decreased moisture retention (Lai 1983, IITA, 1992). Consequently, soil fertility declines, adversely affecting crop yields, labour productivity and returns from farming. What then has been the structure of land in terms of sizes cultivated, the type of cropping pattern adopted and the tenurial arrangements among others all of which affect output levels?- 2 In Ghana, agricultural production is largely rainfed and therefore seasonal. There is a peak demand for labour for certain farm activities and because labour has competing uses with associated higher prices, the small scale farmer mainly depends on family members. However, due to the increasing monetization of the economy, decreasing family size, increasing rural-urban migration and increasing school attendance of children (GSS, 1995), the small holder farmers will have to rely more and more on hired labour which is getting more and more expensive. Thus, the availability of family labour during peak season is a crucial factor determining the level of farm output (Ewusi et al.. 1983). Against this background, what has been the structure of agricultural labour?- Capital inputs are required in the right proportions in combination with land and labour inputs to augment production. Due to the rerroval of agricultural input subsidies, the prices of productivity enhancing inputs such as fertilizers, weedicides and other improved inputs are relatively high. This situation, coupled with the high cost of agricultural labour which is beyond the pocket of most farmers and seasonal low output prices (HARP, 1983) call for the examination of the ways farmers allocate their available resources and the structure of capital inputs in terms of forms and amounts employed in agricultural production. The second aspect of the study concerns the efficiency in the use of resources by small scale farmers. With the increasing costs of agricultural inputs such as labour, fertilizer, improved seeds and weedicides, it is important that small scale farmers use the 3 available resources at their disposal efficiently to increase yield. Special focus is placed on different groups of farmers by type of land tenure in the study of efficiency in the use of resources by small scale farmers. This is because many studies have indicated that the type of landholding affects the efficiency in the use of resources by small holder farmers (Dadson, 19 69; Baumik, 1991; Junankar, 1976). There has been some controversy oyer the efficiency in the use of resources by tenant (sharecroppers) and owner farmers. An owner farmer owns the land he cultivates and provides all resources (i.e. land, labour, capital and management). A tenant farmer (i.e. sharecropper) does not own land but as an agreement for the use of land for farming, he gives out a stated proportion of his total produce as rent to the landlord. One school of thought known as the “Marshallian view" associates inefficiencies with sharecropping systems due to insecurity of tenure (Feder and Ochan, 1987), while another school (the equal efficiency view), contends that sharecropping systems are not associated with inefficiency in the use of resources but do use resources as efficiently as owner- operator systems provided there is fair sharing of production cost between the landowner and the tenant farmer (Bishop and Toussaint, 1958). In Ghana, there is the belief that because sharecroppers bear all production costs, there is no incentive for the sharecropper to employ the required levels of inputs hence the sharecropper produces inefficiently or obtains lower outputs compared to owner farmers. This situation has led once to a call 4 for the abolishment of sharecropping systems and Ghana in replacing it with a cash tenancy system which is considered a better system in terms of efficiency in the use of resources (FAO, 1985). Dadson (19 69) also notes that for developmental purposes, owner-operator systems and cash tenancy should be of priority. These recommendations for the replacement of sharecropping system in Ghana are not based on empirical evidence. There has not been any study in Ghana to substantiate quantitatively the comparative efficiency in the use of resources by sharecroppers and owner operators. A study carried out by Mi^ot-Adholla et al., (1990) on “Land Tenure and agricultural productivity in Ghana" examined the insecurity of the use of farmland by tenant farmers in three districts of Ghana. They found that so far as security of tenure was concerned in the study districts, tenant farmers enjoy maximum security and that they found no evidence of tenure insecurity contributing to agricultural inefficiencies. This study still did not deal with the issue of efficiency in the use of resources by tenant and owner farmers. It should also be noted that due to differences in the social and traditional set up of different communities in Ghana, their findings which are based on only three districts in Ghana cannot be concA.usfi.ve for Ghana. Against this background, what is the relative efficiency in the use of resources between owner and sharecropping farmers?. The study focuses on the foodcrop subsector specifically maize. This is because the foodcrop subsector contributes the highest percentage of agricultural gross domestic product (MOFA, 5 1991) and the fact that foodcrops form the major source of our diets. This study limits itself to the maize foodcrop because statistics on average and achievable yields of major foodcrops from 1987 to 1990 indicated that maize had the highest yield gap percentage of 317% (MGFA, 1991). 1.2 Objectives of the study The primary objective of the study is to investigate the structure and efficiency in the use of resources in maize production. The specific objectives of the study are: (i) To document the present structure of resource use in maize production in the study area. (ii) To determine the implications of thee existing land tenure systems on maize production in the study area. (iii) To conduct a comparative assessment of the efficiency in the use of resources between sharecroppers and owner-operators in the study area. (iv) To recommend measures to improve factor use efficiency. 1.3 Relevance of the Study This study has food security implications because it concerns increased production by way of efficient use of resources. Food security is one of the specific objectives of the Medium Term Agricultural Development Programme meant to provide all Ghanaians 6 with food security through adequate and nutritionally balanced diets at affordable prices. It is also a policy of the Eastern Region to improve agricultural productivity (through efficiency of production) to increase farmers' income, diets of people and raise the general standard of living of all engaged in agriculture (DED, 1990). This study could form the basis upon which the efficiency of maize production by farmers in the area could be further discussed. Another relevance of the study is that, there is little work done in this area. Few related studies conducted by Atsu and Owusu (1971) and Atsu, Ewusi and Gyekye (1983) indicate how agricultural labour and land are utilized but have not touched on the efficient use of these resources. In addition, studies conducted on the impact of land tenure on agricultural production efficiency used a qualitative approach in explaining how tenancy affects agricultural production efficiency. This study adopts an econometric approach to determine the relative allocative efficiency of owner and sharecropping farmers. Knowing the structure of resource use is important because it may help to understand the current structure of agriculture of which the effect of the changing economic policies, increasing population and agricultural technology could be studied in future and what policy directions to take in drawing up a programme for agricultural development for the country. Finally, the study will add to the understanding of issues particularly on land tenure and agricultural production efficiency and will serve as a reference piece for further related studies. 1.4 Study Area The study was conducted in the West-Akim district of the Eastern region of Ghana. Recent agricultural statistics on the region indicate that West-Akim, Kwawu North and Fanteakwa districts contribute the highest proportion of total maize production in the region. In the 1993 production year, the districts produced 12,700mt of maize each which was the highest in the region, (PPMED, 1993). The West-Akim district was selected for this study because of proximity to area of the author's residence and cost in terms of transportation and accommodation which are affordable in this area. Three sub-districts namely:- Adeiso, Osenase and Oworam were selected for the administration of the questionnaires. The selection of these sub-districts was based on information obtained from the District Extension Department that they are the main maize producing areas in the district. Within these sub-districts six villages were randomly selected from a list of villages. These selected villages are Asuofori, Akanteng, Ekoso, Pabi, Oworam and Kwametia. Figure 1 presents the map of the study area showing the locations of the study villages. The vegetation of the study areas is mainly forest, characterized by high humidity and temperature. The rainfall is bimodal i.e., from April to July and from August to November. The 8 annual rainfall figure falls between 1500 and 2 00mm which is suitable for maize production. The study area comes under the forest ochrosol type of soils (figure 2). information on the nature of the soils in the study villages shows that the soils can be sub-divided into the Swedru, Nsaba and Akroso Series (Adu and Asiamah, 1992). The Swedru series is reported to consist of grey-brown clay loam on the topsoil while the Nsaba series comprises a brown less completely-drained associate of Swedru series. The Akroso soils are said to be associated with Swedru and Nsaba soils and are reported to be more silty and heavier in texture. These soil series are according to Adu and Asiamah (1992) very good soils for crops such as maize, cassava, plantain, cocoa among others. The topography of the area is gently undulating. The population density of the study area is 93/km2, (1984 population census). This shows that the area is densely populated. The major occupation of the people in the study villages is farming, specifically maize and cassava cultivation. Infrastructural development in the study villages is low. There is no electricity and access roads are lacking. All the study villages use bore-holes as their sources of water supply. The health delivery system is mainly the unorthodox type but some of the people seek medical assistance from the district hospital. There are lack of schools and the few existing ones are inadequately equipped. 9 1.5 Limitation of the Study The major limitation of the study was that the author was not able to adopt the recommended method of collecting field data on exact land areas cultivated by the farmers. Upton (19 87) has recommended that, to obtain accurate data on land areas cultivated to a given crop, the researcher must visit individual farms and carry out field measurements. This was not possible because the data collection exercise was carried out months after the major growing period. Rather farmers were interviewed at their homes. since with small scale farming, there is the possibility that some farmers may not have exact knowledge about the land areas they cultivate, they may overestimate or underestimate them. The expected errors of underestimation or overestimation of land areas cultivated by farmers were minimized by cross checking the data provided with help of Extension Officers. Because the officers visit the farms of the sampled farmers, they have fair knowledge of the land areas cultivated to maize by these farmers. 1.6 Organization of the Study The study is organised into five chapters. Chapter Two reviews the existing literature on the concept of structure of resources, how resource structure affects agricultural productivity, concept of efficiency of resource use and review on the comparative efficiency of sharecroppers and owner-operator systems. Chapter Three presents the study methodology. Presentation and discussion of results is in Chapter Four. In Chapter Five, the final chapter, is presented the summary, conclusions and recommendations from the study. 10 Fig 1 } MAP OF THE STUDY AREA IN THE WEST AKIM DISTRICT Fig. A MAP SHOWING THE MAJOR SOILS OF GHANA Ra i n ( o r c s t : - \ m \ O x y ta l i M o i s t S e m i - D c c i d u o u s F o r e s t : --Z -J fo rc s ( O cluoso ls Forest O c h ro s o l-O x y jo l ln (e rg f*d e s R u b fiso l O c h ro to l in te rg n d e s I n t e r i o r W o o d e d S a v a n n a : - | * ■* G ro u rv d w ilc r l^ le r ic ic Soils S a v in a * O ch ioso ls A c k i G k ito ls Southeast Coastal S ivanna:- N j f j t j O chco toU L * lc (K ic S a r * ! / Soi(s Trop4c*J Dl*ct Clays ck M.utc toHs Tropic*< G rey Carthc S odkrm V W iso is . Coastal S andy Soils 0 00 km <— — I---1 l I / Accra Ta ko o d i ------------W EST AKIM D IS T R IC T Durce: D i c k s o n a n d B e n n e h . 12 CHAPTER TWO 2.0 LITERATURE REVIEW 2.1 Introduction The chapter is divided into four sections. The first section reviews the concept of structure of resource use in agriculture, followed by a review on land tenure, then the concept of efficiency and that of resource use by tenant and owner farmers and finally, a review on the measures of assessing resource use efficiency. It should be noted that the concept of structure of resources in some studies refers to the structure of a farm and in others as the structure of agriculture. In other words, the structure of resources gives a picture of the state of agriculture or the structure of a farm. The second section of the chapter reviews studies on land tenure systems in Ghana. It reviews the different forms of land tenure systems in Ghana and how the traditional form of land tenure has transformed to other forms. Section three reviews (i) the concept of efficiency and (ii) the comparative efficiency in the use of resources by owner farmers and sharecroppers . Measurements of efficient resource use and the theoretical frameworks are reviewed in the last section. With regard to the structure of the resources, the review will come out with what the structure of the resources mean and how the structure is influenced by economic transformation and 13 technological changes. The review on the land tenure will help in knowing which types of land tenure arrangements exist and their terms of holding. This is important because it is hypothesized that the type and terms of agreement of landholding influence the type of farming technique and input usage adopted, (Junankar, 1976). The review on the comparative efficiency of resource use by owner and sharecropping farmers provides various arguments that have been put forward to support the efficiency in the use of resources by the two farmer groups. Finally, the review on the measures of efficient resource use will help to identify the best measure to use for the comparative assessment of efficiency in the use of resources. 2.2 Concept of Structure of Resources A review of the literature reveals that the structure of resources are examined with two different perspectives. One view of structure is the composition of a particular resource, the other view is the proportions of resources to each other in any production. Stabler (19 75), refers to the structure of a farm as the proportion of each resource used. He further notes that generally, the structure of a resource in relation to other resources i.e. its combination with the other resources is also an indication of farm structure. Kwadzo (1995) in a Socio-economic study of small scale farm households on the Vertisols of the Accra Plains, looked at the proportions of resources used in terms of their production cost 14 structure. This was to find out the extent to which resources are utilised in the face of changing agricultural technologies and increasing cost of productivity enhancing inputs such as fertilizer, improved seeds, weedicides and tractor services. The method used to analyse the proportions of the resources in the study was to estimate the cost per hectare of each of the resources for each farmer. He found that for all farmers, labour input constituted the single highest cost of production (50-80%) which implies that less labour saving techniques were used. Syndgrass and Wallace (19 75) similarly examined the changes in the use of major United States farm inputs such as labour, machinery, fertilizer and seeds over a period of 44 years i.e. from 1929 to 1973 in a period of economic adjustments and changing agricultural technologies. They used the indices of prices of the major farm inputs to study the pattern of change in the use of the inputs. The findings were that, farm labour use continuously dropped and use of machinery/power, fertilizer and seed increased throughout the period. This finding indicates that over the period of study, labour saving techniques replaced farm labour which had positive implications on total production. Harvey (1966) discusses the concept of structure in which he outlines the economic structure of agriculture in Europe and examines how this structure has been influenced by past economic and legislative circumstances. His concept of structure covers the number and sizes of farms; type and intensity of enterprise mix; land and labour use among farms. Hill and Ray (19 87) defined 15 structure as a term referring to the inner composition of something. They used for example, the structure of a building to mean it's subordinate parts which make up the whole. They noted that the purpose of knowing the structure of something goes beyond simple curiosity. Such information gives insight into how the particular thing being referred to functions or works and even more importantly allows for possible explanations why certain things have happened in the past and enables future responses to be predicted. They looked at the change in the structure of an input like labour as being the reduction/increase in manpower it engages and the rise/decrease in use of machine. Hill and Ray (1987) examine the structure of United States' agriculture in the following way: They look at land structure in terms of size group of farms, type of farming and form of tenure.. With regard to labour structure, parameters like the size of labour force, age, sex, employment status and family and hired labour composition. With capital, the amounts and types employed are examined. Shawyer (1990) in studying farm structure and farm families of a Nottinghamshire field area used number of farms, size of the farms, capital such as mechanization and the use of chemicals, amount of labour employed to represent the farm structure. The study revealed the following changes over a period of 40 years: a reduction in the number of farms by half and an increase in the size of remaining farms; an increase in mechanization and in the use of chemicals; and a reduction in the amount of labour employed, all of which contributed to yield increases in the United Kingdom. 16 2.2.1 Labour Structure In agriculture, labour is measured in man-hour or man-day of normal work by an individual for a specified period of time. One- man hour is the amount of work, output per man hour- In much of rural Africa, access to labour, rather than land, is the basis of economic and political power (Upton, 1987). This reflects the relative sparseness of population and absence of labour saving machinery, as a result of which the labour available for critical tasks like planting and weeding is an effective constraint on production. The amount of labour used (actual labour input) over a given period on a particular farm, depends upon the family structure, the number of hours worked and the rate of working per hour (Kwadzo, 1995). A common trend in the traditional system is the extended or joint family unit, consisting of more than one married man plus dependents which is breaking up into nuclear family units, one married man plus dependents within the same household (Kwadzo, 1995). Labour used in agricultural production can be classified into various groups: family labour, comprising, male adults, female adults and children; hired labour made up of adult males and females and communal labour among others. within the farm family, there is some form of division of labour. Many tasks are traditionally linked to age, sex, family or hired labour specific. Most domestic works like raising children in addition to planting, harvesting and processing are the responsibility of women. Men, generally, carry out heavier tasks such as land clearing, land preparation and weeding. Kwadzo (1995) and Adegeye 17 and Dittoh (1985) found that the major type of labour employed on small farms are family labour (adult male, adult female and children). Hired labour was found to be mostly used for land clearing and weeding. Norman (1972), Spencer (1976), Byerlee (1980) and Kwadzo (1995), have shown that the percentage of labour input supplied by hired labour is usually below 2 0 percent on small farms. Therefore, hired labour is not a critical factor in increasing agricultural productivity, (Ewusi et al., 1983). Seasonal labour supply is a major constraint on expansion of production characterized by the use of traditional technologies. The availability of family labour during peak season is a crucial factor that determines the level of farm output and income, (Ewusi et al., 1983; Anthonio & Upton, 1965). Anthonio and Upton (1965) observe that although hired labour is often used to supplement the family labour, it has not played a major role in increasing the supply of labour and alleviating seasonal bottlenecks in sub- Saharan Africa. In many areas, the supply of family labour is falling due to rural-urban drift and increasing number of children attending school. In many parts of the tropics, the area of land cultivated is decided by the amount of work the family can do. If the farmer could get more labour, he could cultivate more land. In such a case, the labour supply is limiting the size of farm. Reviewing agricultural policies in the Organization for Economic Co-operation and Development (OECD) member countries, it was noted that the general image of agriculture has changed 18 considerably since 1950 in most countries (OECD, 1975). Infact, economic forces from 1950 to 1975 induced the application of labour saving techniques thus increasing land and labour productivity. These forces led to structural improvements and new forms of agricultural co-operation and made it easier for farmers to earn additional income outside agriculture. The adjustment process had been greatly determined by the special circumstances of individual farms, such as natural production conditions, possibilities for enlargement of cultivated area or intensification of production, financial position and the capacities of the farm operators as well as the family labour available and the desire of farmers or their heirs to stay in farming. The agricultural adjustment process makes agriculture more capital intensive with respect to both real and non-real estate investments. Moreover, adaptation to new conditions is unavoidable in that holdings of farmers, who neglect the exigencies of modern times and stick to their traditions, became inviable. Though they generally allow the operator a minimum income during his lifetime, such farms on the whole do not survive transfer between generations. This type of holding is often to be found in the small and medium size groups for which the financial implications of modernization are generally burdensome (OECD, 1975). Sendaro and Forster (1992) examined the effect of technical stagnation and the changes in age structure of peasant producers in rural Tanzania. It was noted in the study that agricultural production has been progressively declining in recent years. The 19 explanations offered for this situation include factors such as environmental and climatic conditions, low producer prices, poor marketing facilities, poor infrastructure and transport facilities. However, Sendaro and Forster found that less attention has been given to the age structure as an important factor in explaining the decline in production. They indicated that the agricultural producing population has become old and as a result there has been no significant technical change. Evidence indicates that at any given time it is those aged 3 0 to 64 years and above who engage in agricultural production. The young people involve themselves in other economic activities until they have grown older and settle down to farm. This therefore implies that there will be more older people in farming which may have negative implications on yield because labour productivity may fall due to the ageing farming population. Ofori (19 71) found that the problem of rural development in Nigeria has been accentuated as a result of rural migration. Young rural labour particularly those who have acquired some formal education, have continued to migrate to urban centres in search of wage price jobs. The consequence of this is that there is shortage of rural labour. This leaves agriculture in the hands of the older, non-literate rural population with consequent repercussions on managerial ability and productivity. Majerova (1991), writing on the impact of privatization on the structure of agricultural labour, used age as an element of agricultural labour structure. He notes that the changing age 20 structure of the farming population i.e. towards old age has adverse implications for productivity. Hill and Ray (1987) also found that due to a constant state of flux or adjustment in agriculture in the United Kingdom, the structure of its inputs has changed - notably the reduction in manpower it engages and the rise in use of machinery. Secondly, the number of small sized farms has fallen sharply and replaced by larger sized farms since the 40's. These changes have greatly influenced increases in outputs. Writing on the changes in the Korean agriculture due to rapid economic development, Chung and Park (1991) found that as farming has changed from subsistence to commercial production, average farm size h. increased. ThJ®y al3o found that small farm size is one of the basic obstacles to increasing production. Improved technology, increased farm size, group fa, ing and co­ operative utilization of farm equipment are all ways of increasing output. 2.2.1.1 Pattern of Farm Labour Use in Ghana In Ghana, the pattern of farm labour use differs significantly between the two southern and northern sectors. In the northern sector, characterized by prolonged dry season, all farm activities are concentrated in approximately one-half of the year and farm -labour-use is distinctly seasonal. Here the farm household normally provides all the labour needed. Few children go to school;also wives and husbands tend to participate actively and jointly in the farm operations. Hired labour is occasionally 21 The foremost factor behind the existing pattern of allocating farm labour is food security. The small scale farmers in the southern sector, unlike their counterparts in the North, do not use farm manure or chemical fertilizers to enrich the soil (Atsu et al, 1980). Diminishing returns to labour thus quickly sets in as labour-use is intensified; rather than drive the marginal product of labour further down through a more intensive use on a piece of land, the farmer chooses to distribute his labour over a number of farms, since the land costs him little or nothing at all. This way, the farmer is assured of a greater total production from all the farms combined (Atsu et al., 1980). 2.2.2 Capital Structure Capital is an important factor in production. Knowledge of the structure of capital in agricultural production may indicate whether agricultural production is subsistent or on commercial basis. In agriculture, capital is classified into two forms: fixed (investment capital) and variable capital (working capital). Fixed capital is the form of capital which does not vary with agricultural output while variable capital on the other varies with output levels. Working capital can also be classified by type of input i.e. seed (improved or local), chemical technology, mechanical technology and labour. The proportions of these capital types differ in usage in agricultural production depending upon whether the scale of operation is small or commercial. The structure of capital in agricultural production may have its 23 implications on agricultural output. For example, in small scale or traditional agricultural production, rudimentary capital inputs such as cutlasses and hoes are employed and there is also little use of output increasing inputs such as fertilizer and weedicide. The result of this is low agricultural outputs. The opposite is true for large scale production where there is investment in machinery and land, application of improved technologies on larger scale which ensure greater agricultural outputs. Economic theory emphasis capital formation as the lever of development, (Phiri, 1991). Nurske (1953) believes that the route of escape from countries caught in the vicious circle of poverty lies in capital injection into their economies. Mellor (1962) points out that in order to increase output of traditional agriculture, there must be injection of capital. Similarly, Heady (1966) notes that the injection of capital is the ideal step in displacing human resources and increasing total production as well as raising productivity during farm modernization and economic development. This injection of capital could come in two ways. First, is the direct substitution of adaptive and/or new mechanical power for labour. This will enable each person to manage more hectares. Second, is the indirect substitution of biological and agro-cherrdcal innovations for labour. These biological and agro­ chemical innovations of new capital forms include fertilizer, feed additives, new crop varieties, improved seeds, insecticides, herbicides, fungicides and others which increase output per hectare while causing less labour to be required per unit of output per 24 while causing less labour to be required per unit of output per hectare. Heady and Jensen (1954) reveal that many studies of production economics have shown that substantial potential exists for increasing the efficiency of resource utilization. Studies dealing with large aggregates and employing roughly defined variables, as well as micro level studies based on experimental and survey data, have convincingly attested to the existence of potentials under modernization based on injection of the two forms of capital (Heady and Jensen, 1954). La-Anyane (1985), has observed that fertilizer, farm tractors and equipment and processing machinery will be the key inputs in the next twenty years from 1985. He further noted that as their costs have been increasing, it is important that they should be used efficiently so that the greatest number of farmers can have access to them for increasing food and agricultural production. In addition to efficient fertilizer use, improved seed and better husbandry practices should be adopted by the farmers. A NARP (1993) report notes that, in order to sustain maize production at the current level of near self sufficiency, production growth rate should be at least 5% per annum. This rate according to the document can be achieved by farmers provided they adopt improved technology and inputs such as seed, fertilizer, other agro-^chemicals and mechanization of operation. 25 2.2.2.1 Pattern of Capital Use in Agricultural Production in Ghana In Ghana, the bulk of food is produced by small scale farmers. It is generally known that small-scale farmers adopt traditional way of farming i.e. the use of rudimentary tools like cutlass and hoe, mixed cropping and dependence on family labour for farming among others. Huge investments in capital equipment is absent in the Ghanaian agriculture. Though improved inputs such as fertilizer, weedicide, high yielding seeds, tractor services are employed in agricultural production in Ghana, they are employed on limited scale. The employment of these inputs may differ from one geographical region of the country to another. For example, soils in the Northern sector are' relatively poor in organic matter and nutrients due to lack of vegetative cover. This situation compels farmers in the North to use fertilizer and other fertility enhancing chemicals more than their counterparts in the south where the soils are considered richer in nutrients (Atsu et al. 1980). Quantitative estimates from crop budgets of the pattern of capital use on small farms in Asutuare and Somanya show that fixed capital inputs contribute only 5% of the total capital input cost, variable capital inputs contribute 27% and the remaining 68% come from labour (Kwadzo, 1995). 26 2.2.3 Structure of Land Agricultural land tenure according to Dadson (19 69), refers to the legal, political and socio-economic arrangements governing the ownership and management of agricultural land. He identifies three main forms of land tenure outside the communist system where farming is undertaken under state control: (i) communal or group tenure (ii) owner-operationship or owner-occupiership (iii)tenancy. The particular patterns of tenure in any given place depends on the customs and history of the area, the economic opportunities for land relative to its supply and the outcome of bilateral bargaining between the immediate landowner and the operator, (Dadson, 1969). As with other resources, the condition under which land is held influences the pattern and efficiency of use and the production of food, (Dadson, 1969; Karan et al, 1982). Traditionally, in Ghana as in most parts of tropical Africa, land is generally owned communally by people having common descent or owing allegiance to a symbol of collective authority, for example, ■ the 'stool' arrong the Akan of southern Ghana, (Bensti- Enchil, 1964; Ollenu, 1962; Parsons, 1971; Pogucki, 1962). Therefore the community or family constitutes the basic medium of access to land, (Gyasi, 1994). The individual members are supposed to enjoy free inheritable usufructuary rights over communal land on the basis of kinship (i.e., member of community without prejudice 27 to the communal ownership). Strangers or non-members may have access to communal land through the transfer of rights of use by the land-owning family usually through the leader, chief or occupant of the land. Another increasingly used medium to access land is the government, which may acquire land compulsorily from the original owners, through legislation for government's own use or by use of others, in so far as the acquisition is deemed to be in the interest of the public, (Gyasi, 1994). One school of thought sees the traditional communal land tenure system as nebulous, inherently conservative, incapable of adapting fast enough to change and therefore a drag on development (La-Anyane, 1962; Migot-Adholla et al, 1990). It was for example observed that: "innovative and investment-oriented agricultural enterprise ... are inhibited" (King, 1973, P7). Other constraints on development have been associated with lack of clarity about the allocating authority and boundaries which rnay result in disputes. There is trespassing, inequitable tenancies, lack of security for tenants, especially alien or stranger farmers and inability to use corrtnunally owned land as collateral for loans. In addition to these factors, the customary system of inheritance, which in certain cases, excludes females, and entails the subdivision of land among succeeding generations with consequential fragmentation of holdings is also reported to be a constraint to development (Arhin, 1985; Johnson, 1962; Migot-Adholla et al., 1990; Ninson, 1989). 28 Though the communal system of land tenure was a bane to development, it was not static. The system in Ghana did not prevent extensive acquisition of land, even by strangers or migrants who do not belong to any of the land-holding groups in the locality, for cocoa farming especially from 189 0s to about 1950 (Hill, 1963; Johnson, 1962), but also from 1950 onwards, (Arhin, 1985). Nor did it prevent the phenomenal post-1970 oil palm farming expansion, involving an over five fold increase in oil palm hectare in 20 years. This would seem to underscore the view that basically, the traditional system is a dynamic one, capable of adapting in good times to favourable economic opportunities, (Gyasi, 1994). Individual ownership and tenancy appear to be the forms that emerge in development, (Dadson, 1969). Under owner-operatorship, the farmer owns the land he cultivates and provides all other resources (labour, capital and management). He has complete control over the farm. Under tenancy, there is a division of economic function between the landlord and the tenant. The landlord usually provides land only, and the tenant provides labour and capital in the production unit. The terms of the contract determine how the resources of the landlord and the tenant are to be combined and how the returns are to be distributed. It is this question of resource allocation and returns distribution that the economic problem of tenancy arises, (Dadson 1969). 29 There are two types of tenancies: cash and share tenancies. Under cash tenancy (or cash lease), a fixed sum is charged per hectare of farmland and payment is independent of production. Under share lease, the rent is a stated proportion of the total yield. There are two forms of the share lease namely 'ABUSA' system and Abunu system. Under the Abusa, one-third of the produce goes to the landlord and the remaining to tenant. 'ABUNU' tenancy is where the share is half each, (Dadson, 1969). Dadson, reported that the economics of the different forms of tenure may be examined or demonstrated with reference to their effects on the amount of various resources applied and the level of production induced, the size of farm business, the selection of enterprises ie, type of products; the horizon of investment; the length of lease; willingness to invest; the life of investment and arrangements regarding compensation for unexploited resources. 2.4 Comparative Efficiency of Tenancy (Sharecropping) and Owner- Operatorship Systems in Resource Use A lot has been written and debated about the comparative efficiency of resource allocation in agriculture under alternative forms of land tenure in the economic literature related to land reform and agricultural development in less developed countries. According to Ip and Stahl (1978), a large body of economists and other social scientists concerned with underdevelopment contend that tenancy (especially sharecropping) results in an inefficient allocation of resources as well as a reduced incentive to improve 30 agricultural land. This school of thought also holds the opinion that the persistent poverty of the rural population of less developed countries is due to substantial variations of tenancies as forms of contractual arrangement. To this school of thought, land reform measures such as reduction in cash rental rate, abolition, of sharecropping and minimum term leases are viewed as policy instruments that can improve development prospects. Others, however, disagree with this view. Those of the "equal efficiency" school argue that the form of land tenure has no bearing on allocative efficiency and would attribute the poverty in t^« agricultural sector of less developed countries not to the prevailing land tenure arrangements but to their factor endowment which is a large body of unskilled labour relative to land and capital. This school also believes that arguments of landireform proponents' in support of reform are more often than not on normative welfare criteria rather than positive criterion of economic efficiency, (Ip and Stahl, 1978). An empirical dimension has been added to the debate in an attempt to resolve the controversy. Results have varied, but generally it has been found that tenancy is not necessarily less efficient than owner cultivation. According to Ip and Stahl (1978), the theoretical arguments of the equal efficiency school as well as the empirical studies purporting to support the equal efficiency school seem to be seriously misleading. The limitations of their analysis stem from their failure to take account of the interactions and linkages of the agricultural and other sectors throughout the development 31 process (Ip and Stahl, 1978). It is contended that the "efficiency" of alternative land tenure arrangements and associated land reform recommendations cannot be analysed out of context of these intersectorial linkages and interactions. Land reform, and the choice of an optimum land tenure system, has implications not only for the efficiency of resource allocation in the farm sector as a whole. In their conclusion, Ip and Stahl (1978) noted that when transaction costs, the role of entrepreneurship, and economic incentives are explicitly introduced and analysed in the framework of intersectoral interactions and linkages, land reform measures redistributing land to the peasants, substituting owner-cultivers for share tenants, tend to improve agricultural production efficiency, resource allocation between farm sector and other sectors, and contribute to economic development of less developed countries, contrary to conclusions reached by writers of -equal efficiency1' school. Bhaumik (1991) in his paper on “Tenancy and Resource Allocation" covering 224 tenant households in 12 villages in West Bengal of India, found that on the whole there seems to be a tendency on the part of farmers to use higher levels of inputs per acre and to achieve better yields on their owned land compared with land farmed by sharecroppers. This, according to Bhaumik illustrates the negative aspects of crop-sharing systems. Such a situation emerges due to the ineffective monitoring of tenants' activities by landlords. He further found that there is no significant difference in economic performance between the owner- 32 operator and fixed cash rent tenant households. It is shown that for the small marginal and landless rural people, sharecropping is a means for their survival, but it plays a negative role by discouraging agricultural investment and hindering agricultural productivity, (Momin, 1991). Feder and Ochan (1987), hypothesised that the negative effects of sharecropping can be attributed to two related factors: (a) ownership insecurity: with ownership insecurity, investments in land improvements and equipment for land cultivation may be more lacking than under secured ownership. This is due to the uncertainty as to the length of tenancy which may affect a farm's long term planning. This situation will induce farmers to shift investment to activities not related to land cultivation or to invest less (and consume more), (b) Ownership insecurity does not allow land to be used as a collateral for loans. Lack, of collateral limits the farmers' ability to borrow from institutional lenders because unsecured loans are more risky for such lenders. Constraints on credit limit the farmers' investment possibilities. Both factors imply that ownership insecurity reduces farm capital formation and land developments and hence productivity is affected. Migot-Adholla et al (1990), while sharing the same views on tenancy systems limiting land improvements and access to institutional credit, debunk the notion that tenure insecurity is a source of agricultural resource use inefficiencies. In their study which was carried out in three districts in Ghana, they found that tenure security is high as measured by rights over land and 33 low incidence of dispute, except for migrant farmers from other regions. They further noted that, the issue is not gross inequality in land distribution as some writers claim, but the extent to which indigenous land rights may be a constraint on agricultural development. Reynolds (19 77) held the view that as the share tenant receives only a fraction of the output and only a portion of the marginal product of any tenant-supplied input, he would be encouraged to undersupply these inputs and thus produce inefficiently compared with fixed-rent and owner-operated contracts. Empirical work, by Vernon (1971) tends to undermine the proposition that share tenancy is less efficient than fixed-rent and owner operated systems. He exemplifies the theoretical inefficiency of labour input by constructing hypothetical partial budgets for the use of fertilizer and insecticide on the assumption that the landlord shares in cost. He notes that "the analysis is consistent with the proposition that share tenancy does reduce the incentive for intensive use of labour inputs and for the use of output increasing inputs such as fertilizer and insecticides. However, in his study, it appears that share tenancy where landlord provided other inputs apart from land may actually encourage a more rapid rate of adoption of labour saving technologies than would occur under fixed rent holders or owner-operatorship system. This is expected since the farmer gets rrore for less labour input. He further notes that an empirical evidence collected in the Philippines tends to show that, on small farms, a higher output per 34 hectare was observed under share tenancy than under owner operation for the same size of farm growing the same crops; the converse was found for larger farms. Moreover output per man was lower on share tenancy again on small farms. In his conclusions, he notes that it is difficult to assess the statistical significance of his findings and as a result support from them for the traditional view of inefficiencies associated with share tenancy. However, some studies have established that in terms of superiority in the efficient use of resources, land improvements and increased output levels, owner-operatorship and cash rent systems should be recommended, (Bhaumik, 1991 and Dadson, 1969). Migot-Adhollar et al. (1990) study on "land tenure and agricultural productivity in Ghana” is the most recent study conducted with regard to land tenure and agricultural production. Their study covered selected communities and their conclusions were based on qualitative explanations of the data they collected. Therefore a study using a quantitative approach and conducted in a different geographical area could contribute to clearing the controversies surrounding tenancy and agricultural production efficiency. 2.5 Concept of Efficiency Efficiency in general refers to a ratio of what is produced to input used, (Makeham and Malcolm, 1986). For example, Raleigh (1958), notes that land is said to be used efficiently when it yields optimum returns from a given enterprise. In the literature 35 on the concept of efficiency of resource use, the concepts of economic efficiency (ie. allocative or price efficiency) and technical efficiency are normally encountered. Technical efficiency refers to the ability to obtain the highest amount of output with given amounts of factor inputs and allocative efficiency is the concept of efficiency in which resources are allocated in the "Pareto" sense (optimum output) so that marginal value products of resources are equal to their unit prices, (Onyenwaku, 1991). Heady and Jensen (1954), outlined a number of factors which affect labour efficiency. These include enterprise combination, replacement of labour with capital and equipment, the amount of capital combined with a given amount of labour and how labour is managed and supervised. As has already been noted, substituting capital and high capacity machinery for labour can also increase work, output per man. Optimizing output results in economic efficiency. On many farms, substitution of capital for labour can greatly increase labour productivity and incomes if the displaced labour can be combined with more capital to expand output and size of operations. The efficient use and productivity of any single resource depends on the quantity of other resources it combines with (Heady and Jensen, 1954). According to them, the major reason why labour is used so inefficiently on many farms is that the farms are small and don't have enough resources to combine with labour on hand. A very large part of the labour inefficiency and low incomes on subsistence and sharecropper farms and even on many commercial 36 farms can be solved by adding more capital to the available labour supplies. Adding more capital on farms with limited funds requires the use of the opportunity cost principle so that capital is put into highest profit enterprises for maximum labour efficiency and income. Land productivity relates to the ability of land to yield crops. There are a number of factors that determine the magnitude of crop yields. Among these factors are fertility of the soil, water supply, the availability and the relative proportions of capital and labour input and physical condition of the soil. Soil fertility, according to Acquaye (19 69) refers to the capacity of the soil to supply nutrients both major and minor, in adequate and balanced amounts to plants . A soil may be fertile yet unproductive due to poor and unfavourable physical conditions. Conversely, a soil may be poor in fertility, yet by the use of fertilizers and irrigation, it may be made to produce high yields . Land per se is unproductive unless combined with capital and labour inputs. The proportions in which these resources are combined may determine how efficient land is used. In Africa for example, land productivity is considered low because of the mismatch between surplus land and limited labour and capital inputs, (Bishop and Toussaint, 1964). To improve upon productivity of land, factors such as crop and soil management should be of prior concern. Crop management entails first and foremost the selection of high yielding varieties adapted to local conditions. Secondly, the selected varieties should be resistant to local pests and diseases. Weed control measures, 37 irrigation and other requirements of the crop must be met. Soil management in crop production is particularly concerned with soil water supply, soil fertility level and soil physical condition. Measures to improve soil fertility include green manuring, addition of organic matter to the soil, use of fertilizers and intercropping with leguminous crops. 2.5.1 Methods Of Measuring Resource Use Efficiency The debate regarding the best method to measure farm performance and resource-use efficiency predates the subjects of farm management and agricultural economics as it is known today, (Phiri, 1991). Following the principles of production economics exemplified in the theory of the firm, maximizing profit has been regarded as the primary objective of the farm business. For example, Bernard and Nix (1979) stated that the objective of farm management is to arrive at the particular output that gives greater profit than any other level of output. Similarly, Drucker (1968) stated that management must, in every decision and action, always put economic performance first. The above statements are in line with the theory of the firm which implies that a farm is performing well if it organizes resources in such a way that it maximizes profit. However, the assumption of perfect competition that is implicit in this approach has been criticized by many economists. They argue that, because knowledge about the future is imperfect, agricultural production decision making takes place in an environment of uncertainty. Dillon (1979) notes that this is 38 especially true in under-developed agricultural systems where underdevelopment itself compounds the uncertainty, regardless of whether the decision maker is a subsistence owner, landlord or commercial producer- Economists argue that in the face of risk and uncertainty, smallholder farmers select crop combinations that facilitate sufficient food income for the family's needs. This situation is described by Simon (1955); Cyert and March (19 63) as "satisficing" and by Lipton (1968) as a "Survival algorithm". Where the profit maximizing and household objectives approaches have been applied to small-scale agriculture, the results have almost been at odds with each other (Phiri, 1991). Measures of farmer performance based on the profit maximization approach invariably lead to conclusions that small scale farmers allocate resources ineffienciently and that they are lazy and irrational decision makers. Measures based on the household objectives approach lead to conclusions that farmers allocate resources efficiently according to their subjective judgement of future outcome. Whether or not uncertainty is incorporated into the analysis, gross margins or linear programming method is helpful in comparisons and farm modelling especially in traditional agriculture (Phiri, 1991). Despite criticisms levelled against the profit maximizing approach of assessing resource use efficiency, many studies have used the approach. Kumbhakar (1994) applied the profit maximizing model using flexible production function to estimate efficiency in the use of resources. In his study, a translog production function is used to estimate the efficiency of 39 227 small-scale farms. Kumbhakar (1994) used the profit maximizing framework to estimate technical and allocative efficiencies of the farms. The empirical results show that so far as allocative efficiency is concerned, majority of the farms are found to be under-users of endogenous inputs such as fertilizer, human and bullock labour. Sankhayan (1993) used the Cobb-Douglas production function and the marginal value product and marginal cost techniques to respectively examine the resource productivity and allocation efficiency on a number of farms. The results of the study indicated that resources were inefficiently used or allocated. Matekwa and Mbata (1993) studied the resource use efficiency among small-scale farmers in selected areas of Western Kenya. A production function and the allocative efficiency of the resources are estimated. The results of the study indicate that farmers underutilized modern types of inputs such as fertilizer, pesticides and improved inputs but overutilized farm labour - Olomla (1991) compared capture fisheries with aquaculture (fish farming) in Ondo State, Nigeria to determine how efficient the systems were utilizing resources and how production could be economically increased. In determining the efficiency of resource use, factor productivity and returns to scale, production functions were estimated using the Cobb-Douglas production function. In his study, the marginal value product was compared with the input price to determine the resource use efficiency. Hopper (1965) made an attempt to study allocative efficiency on a sample farms by determining: first the production functions underlying the 40 traditional village production and secondly, the actual allocation of resources the farmers made among their production alternatives . The Cobb-Douglas production function was used for the estimation. In estimating or determining the allocative efficiency, Hoper (19 65) notes that if a farmer has allocated his inputs among his production alternatives efficiently and if he is operating under conditions of competition in the product and factor markets, then the marginal value product of the input must equal to the input price. Other approach based on the profit maximizing assumption used extensively to determine resource use efficiency is the unit profit function approach. Dittoh (19 88), Lau and Yotopoulos (1972), Sidhu (1974), Xotopoulos, Lau and Lin (1976) and Garcia et al (19 77) have used the unit profit function approach in assessing resource use efficiency. The use of the unit profit function to determine resource use efficiency according to Dittoh (1988) has its limitations. Chard and Kaul (1986) outlined certain in built characteristics in the use of the unit profit function which make its use a bit complex. These characteristics are that (i) own price elasticity of factor demand is always elastic with Cobb- Douglas function (ii) all variable factors are complementary to each other and hence the substitutive relation is ruled out by this function (iii) cross-price elasticity of all factors with respect to price of any other factor is the same in magnitude and in sign (iv) the effects of change in any fixed factor is symmetric on all the variable inputs and (v) price elasticity df factor demand with respect to output price is always more than one (elastic). All 41 these factors must be satisfied if the unit profit function is to be applied. The unit profit function is most appropriate for determining relative efficiencies of large and small farms, of different technologies and of different scales of operation eg large and small scale irrigation schemes (Dittoh, 1988). As has been previously noted by (Phiri, 1991), gross margins analysis is more suitable for comparing resource-use efficiency among different groups of farmers producing especially on small-scale basis. This method is used to determine farm profitability which according to Garcia et al. (1977), is influenced by the enterprise mix and efficiency in input usage. The Gross Margins is measured as the difference between the total value of output and the total variable cost of production. The gross margins method is used to study the financial performance of an enterprise, i.e. the productive components of a farm to obtain information about the enterprise's strengths and weaknesses in greater depth than can be derived by whole farm analysis (Buckett, 1981). Taylor and Turner (1989), note that the technique has the advantage of being a quick and simple method of assessing enterprise performance. It is probably the most commonly used measure in farm analysis and planning and also is now used extensively in publications (Makeham and Malcolm, 1986). The Gross Margins per hectare of crop and per head of livestock are widely used for comparative analysis of activities on one farm and between farms in similar environments. For example, if the Gross Margins 42 (GM) on one farmer's maize crop is £150 per hectare and the average GM of a neighbouring farmer is <£300, then he should seek; advice on the technical reasons for his poorer performance given marketing conditions and both farmers using identical inputs. Valid comparisons can be made in terms production unit common to all of the farms or activities being compared. This unit can be land area, if the land used by each is equally suitable. It could also be per unit of labour, (Makeham and Malcom, 1986). The GM method is claimed to have more value for inter-farm comparisons than the whole farm efficiency factors because they are less influenced by farm size and type (Buckett, 1981). Gross Margins are frequently criticised because they neglect fixed costs. Proponents of full costing, the time-consuming technique which attempts to allocate fixed costs to activities even if it is arbitrary, suggest that it is infinitely better than GM analysis. Properly undertaken, the GM method would help avoid such mistakes (Buckett, 1981). In contradiction to the view normally help that the full costing is better than the Gross margins, it has been suggested that farmers have more control over fixed costs than over variable costs. This idea can have an element of truth in some situations. If a farmer has intentions of maximizing his Gross Margins, he possibly has little choice in the variable cost levels he must employ to attain his goal. He can, however, exercise his judgement on the machinery and other fixed costs items, (Buckett, 1981). 43 Phiri (1991) used the GM technique to determine the efficient resource use among different groups of small scale farmers. He compared the average GM per hectare and per unit of labour among the different groups of farmers. In his analysis, he noted that, if the GM per unit of input is greater for a given group of farmers, then that group used that input more efficiently than the other and vice-versa. The strengths of the GM technique are the (i) it is a simple method of assessing efficiency, (ii) the records and accounting are easy and quick., (iii) it does indicate areas of strengths and weaknesses in terms of resource use (Taylor and Turner, 1989). The major weakness as has already been noted is the exclusion of fixed costs in the calculation of GM. This weakness is not a major problem as far as small scale agriculture is concerned. The reason is, small scale agriculture does not normally involve substantial investments in fixed cost items and hence their exclusion will have little, if any, impact on the analysis. Though the use of gross margins may be beneficial, for policy purposes the profit maximizing approach of determining resource use efficiency is more preferable. This is because the gross margins analysis is more useful for the comparison of individual farms than aggregate farms for a given growing period. Since it is assumed that the production levels of small-scale farmers do not vary much over time, meaningful policy conclusions can be drawn if the production function approach in determining resource use efficiency is adopted. 44 The structure of resources is viewed in two ways. One examines the proportions of the resources and the other concerns the composition of each individual resource. Below is the theoretical foundation for objective I. Small scale agriculture in Africa is characterized by excess supply of land and limited labour and capital, (Mellor, 1966). With the economic transformation and changing agricultural technologies, more capital intensive technologies are adopted as observed in the developed countries to meet the fast growing population and industrialization. As a result, the type of farming system, the sizes of farms cultivated, the type of capital inputs employed, the age structure of farmers, the type of manpower used on the farms in terms of technical and managerial skill and the form of farm tenure among others in agriculture must change with changing times to move from subsistence production to commercial oriented production. The theoretical foundation for objective II is that land problems and policies of a nation depend partly on the physical characteristics of the land itself but more importantly upon the stage of economic development, customary or legal rights and the prevailing national attitudes of the people of the country towards land, (La-Anyane, 1969). customary institutions and prevailing attitudes determine the land tenure arrangements of a nation. There are many different types of tenure arrangements in Ghanaian agriculture. These arrangements influence the efficiency with 2.5.2 Theoretical Framework of Analytical Methods 45 which inputs are used. The arrangements also affect the degree of uncertainty encountered in the operation of the farm, (Bishop and Toussaint, 1958). The specific features of land tenure which have constituted barriers to improvement in agriculture are the fragmentation of holdings, the difficulties involved in acquiring new land, the inability of a farmer to make permanent improvements or plant permanent crop on land which is commonly owned or on land which is held by pledging short-term lease, and the absence of registration (La-Anyane, 1969). The tenure system can and do shape the production structure and the land use pattern, (Ofori, 1973). The system can influence the organization of farms by placing constraints upon the accessibility and exploitation of opportunities on the land thereby affecting the security of use of land. With resource use efficiency, the farmer is considered to be a rational producer and that he allocates resources in a way to maximize profit. A rigorous comparison of the allocative efficiencies of any groups of farms requires that the farms be (i) characterized by constant returns to scale (ii) that the farms be represented by the same production function and (iii) that the farms face the same configuration of input and output prices (Onyenwaku, 1991). To determine the allocative efficiency, a production function is estimated. The production function is assumed to satisfy the condition that the marginal physical product of any input is positive and should be declining. It is also assumed that all inputs can divided into two categories: fixed and 46 variable where in the short run the inputs are fixed and in the long run they are variable (Mansfield, 1994). A farm is said to be allocative or price efficient if it maximizes profit by equating the value of the marginal product of each variable input to its price. Theoretically, it has been noted by Taylor and Turner (1989), that though full cost accounting has its advantages, for most farm businesses, it is impractical. As a result of this situation, a system has been developed which overcomes the problem of cost allocation largely by ignoring the costs which are difficult to allocate (regarding them as overhead cost) and concentrating solely on the performance of the enterprises relating to output and variable costs. This is called the Gross Margins system which has the advantage of being a quick and simple method of assessing enterprise performance. No fixed costs are taken into consideration. But it should be noted that when fixed cost is a substantial proportion of total cost, this method is unacceptable. 47 CHAPTER THREE 3.0 METHODOLOGY 3.1 Data and Sampling Technique Both primary and secondary data were used for the analyses. The actual field work was done in April, 1995 but the data collected was based on the 1994 major growing season. Data on the 1994 minor growing season was not included because, according to the sampled farmers, harvest was very poor 'and insignificant as a result of poor rains. A total of 100 farmers comprising 35 owner farmers, 50 sharecroppers, 9 fixed renters and 6 leaseholders were sampled and interviewed. A random sampling technique was used to select the studied farmers. This was accomplished by the help of an extension officer. At each studied village, farm households were picked with a sampling gab of one i.e. farm household selection was alternated. After a farm household was selected, any member of the household who is actively involved in the cultivation of maize and farmed during the studied period was selected for the interview. Personal interviews were carried out with the sampled farmers by the use of structured questionnaires in their homes. The extension officer was present throughout the interview period which lasted for about a month to confirm some of the information provided by the respondents because he has been working with them for most of the time. 48 Data was collected on the total output of maize harvested in kilos, the amount of mandays used by each farmer (both hired and family), the land sizes cultivated in hectares, quantity/value of fertilizer, weedicide, seed, cutlass hoe and basket used for the major growing season. The output price used is the average of the farm gate prices received by all the sampled farmers. The prices used to value fertilizer, weedicide, cutlass, hoe, seed and basket were 1994 district level prices obtained from the district extension department. The cost of labour for farm work was calculated by finding the average of the cost per manday and the cost of cooked/raw food for hired labour. with regard to price paid for the use of land by different categories of sampled farmers, different prices were obtained. For sharecroppers, the price paid for the use of land was calculated based on the portion of the value of output received by the landlord. The sampled owner farmers do not pay any rent on the use of land, but for purposes of this study, how much they would have paid if they were to rent land for farming was used to represent the cost of land to them. Information was also collected on the types of cropping patterns, mode of land acquisition by tenant farmers, length of tenancy, age and gender structure of sampled farmers, cost estimates of inputs, and types of labour and capital used by sampled farmers. Secondary data was also collected on the climatic conditions, topography, population density, and vegetation of the study area from the district extension service department. Information on the 49 types of soils present in the study area was obtained from secondary source. 3.2 Methods of Analysis 3.2.1 Structure of Resource Use For the structure of resource use in agricultural production, two methods were used. One method based on Hill and Ray's (1987) approach was used to analyse the composition of the resources and the other method, based on the cost estimates of the resources was used to analyse the proportions of the resources. In Hill and Ray's approach, the field data obtained were either described in the raw form or presented in a frequency distribution tables or cross-tabulation depending upon the objective in question. In the second approach, the share of each resource in total cost was estimated. This gives an indication of the extent to which each of the resources is employed (Olomola, 1991). 3.2.2 Comparative Efficiency of Resource Use With regard to the comparative efficiency of resource use in maize production in the study area by owner and sharecropping farmers, the Gross margins method on one hand, and the allocative efficiency method, based on the profit maximizing approach on the other hand were used. These methods from the literature have been widely applied to analyse resource use efficiency. The results from both methods were compared to find out if there were any 50 any differences but more focus was given to the latter method for policy purposes. 3.2.2.1 Gross Margins The Gross Margins of an enterprise, say a farm unit, is defined as the value of the total product of the farm unit in a given period of time less the total variable cost of the farm unit in the same period. The Gross Margins per unit of the inputs were computed and compared between sharecroppers and owner farmers to determine which of the two farmer groups used the resources more efficiently. Mathematically, the Gross Margins formula is given as follows: Gross Margins Q iP i - S X i X i i=l where Qj Total output obtained by a farmer in the last crop year Pi Price of 1kg of maize received by an ith farmer Total quantity of an ith input used up in the course of production during the crop year. Unit price of an ith input used up in the course of production during the crop year. i n . 51 In computing the Gross Margins per unit of an input say, labour, for a farmer, the total variable cost of production was deducted from the total output per farmer. The difference was then divided by the labour input to obtain the Gross Margins per unit labour for a farmer. The same procedure was applied to the other inputs for all the farmers. To compare the Gross Margins between the farmer groups, the average Gross Margins was computed for each farmer group. The decision criterion is, the higher the average Gross margins per unit of an input for a farmer group, the more efficient the group uses the input. This conclusion is based on whether there is a significant difference between the means of the Gross margins per hectare or per unit labour between the two farmer groups. The paired t-test was used to test whether there is any significant difference between the gross margins of the two farmer groups. 3.2.2.2 Allocative Efficiency To compare the allocative efficiencies of owner and sharecropping farmers, it is assumed that these two groups of farms are characterised by (i) constant returns to scale (ii) represented by the same or neutral production function and (iii) facing the same configuration of inputs and out prices (Onyenqaku, 1991). It is also assumed that the farmer is a rational producer and that he is a profit maximizer. 52 In determining the relative allocative efficiencies of the two farmer groups, a Cobb-Douglas production function was estimated using Ordinary Least Squares regression analysis. Cobb-Douglas production function was used among the other production functions because it is rrostly used in applied research and easiest in handling mathematically (Koutsoyiannis, 1979). Assuming output of maize is affected by land, labour and capital given other factors which might also affect output of maize. Then a production function is specified as follows: Q = f(Xw X2, X3, u) ........... (1). where Q = output of maize, = land, X2 = labour, X3 = capital and U = error term. To estimate the Cobb-Douglas production function, the equation used is: Qi = A X ^ X ^ X / ^ ........ Ut ............... (2) where Ql = total output of maize in kilos harvested by an ith farmer A = a constant term Xt = total land area cultivated to maize in hectares X2 = total amount of labour used in mandays on the maize farms studied X3 = value of capital inputs used on the studied farms. 53 Ut = error term assumed to satisfy all the stochastic assumptions. a*, a3, are the respective coefficients of land, labour and capital variables. To obtain the estimation equation from equation 2, the log- log function was applied. The regression coefficients, the t- ratios, the R2-ratios and the F-ratios were determined for sharecroppers, owner farmers and the poded sample. A farmer is said to be allocative efficient if he maximizes profit by equating the value of the marginal product of each variable input to its unit price. Thus the allocative efficiency index for each farmer group was computed as follows: MVPU = PjMPPij = rlJKij Kjj = MVP*, ...................... (3) ru marginal value product of the ith input for the jth farmer group the marginal physical product of the ith input for the jth farmer group average price of per kilo maize received by jth farmer group price of the ith input paid by the jth farmer group the allocative efficiency index of the ith input of the jth farmer group. which implies where MVPi:j = MPPjj = Pj = 54 Since the coeffiencients of land, labour and capital are straight elasticities, equation (2) is re-written to include the production elasticities as follows: *ij = Piai A where MPPi = a^Q^/X^ ai;j = output elasticity of ith input for jth farmer group Qj = mean output for jth farmer group Xi;j = mean of ith input for jth farmer group. Other parameters are as defined previously. The allocative efficiency index is a measure of efficiency in resource use. The input is overutilized if K<1 and underutilized if K<1. Absolute allocative efficiency requires that K = 1 for all inputs (Onyenwaku, 1991; Ellis, 1992). To test whether there was any difference in the coefficients of the inputs between the two farmers groups, the Chow test was used. Returns to scales were also computed to find out if the sampled farms are characterised by constant returns to scale. 55 CHAPTER IV 4.0 RESULTS AND DISCUSSION 4.1 Introduct ion In this chapter is presented a discussion on the results of the analysis. The chapter begins with discussions on the composition and proportions of land, labour and capital which constitute the structure of the resources. In the discussion of the structure of the resources, comparisons are made with related studies where necessary. The second section of the chapter discusses the efficiency in the use of land and labour by sharecroppers and owner-operators. 4.2 Structure of the Resources (as defined by their Composition) 4.2.1 Land Structure Land structure is considered in terms of farm sizes, type of cropping pattern and forms of land tenure. 4.2.1.1 Farm Sizes The land areas cultivated to maize by the sampled farmers during the 1994 growing season ranged between 0 and 2.4 hectares. Table 1 shows the percentage distribution of land sizes cultivated solely to maize by sampled farmers. It is seen from the table that, 47% cultivated land sizes between 0 and 0.4 hectares, 20% between 0.41 and 0.60, 13% between 0.61 and 0.80, 5% between 0.81 56 and 1.0 and 15% cultivated land sizes greater than one. Cumulatively, 85% of the farmers cultivated land areas less than or equal to one hectare to maize only and 15% cultivated land areas greater than one hectare but less than or equal to 2.4 hectares. The distribution of land sizes cultivated to maize shows that a higher percentage of the farmers cultivated small areas. The distribution of land holdings in the area also compares with distribution by size holdings in the Eastern region (MOA, 1991). Asked why they operated land areas of such sizes, about 90% of the farmers responded that, the cultivated areas are based on their capabilities to manage the farm, particularly in terms of labour availability: 8% responded that, those were the land areas they could lay their hands on and the remaining 2% did not give any definite response. The implication of these responses is that, provided labour could be made available, larger areas could be cultivated. Table It Distribution of land sizes cultivated to maize only in the 1994 major season Land sizes in hectares Number of farmers 0 - 0.4 47 0.41 - 0.60 20 0.61 - 0.80 13 0.81 - 1.0 5 > 1 15 Source: Appendix C. 57 4.2.1.2 Cropping Pattern The predominant farming practice in the study area is mixed cropping. Out of the 100 farmers interviewed, 83% grew maize as an intercrop and 17% as a monocrop in the 1994 major crop season. Maize is intercropped mainly with cassava though there are few instances of a third crop (Table 2). It can be seen in Table 2 that out of the 83% who mix-cropped, most (76%) mix-cropped maize and cassava, 3% mix-cropped maize, cassava and cocoyam, 2% mix- cropped maize, cassava and plantain and 2% mix-cropped maize, plantain and cocoyam. The average land areas cultivated to the common types of cropping patterns i.e. maize-cassava intercrop and maize monocrop show that almost the same land sizes are cultivated to both types of cropping patterns. Those farmers who monocropped maize attributed the practice to two main reasons: (i) land which is prone to waterlogging and therefore not suitable for cassava and (ii) the possibility of growing at least two crops of maize within the year. The distribution of farmers by reason for choice of cropping pattern in maize production is presented in Table 3. 58 Table 2: Distribution of Farmers by Type of Crop Mixtures Type of Crop mixtures % of Farmers Average land area (Ha) Maize only 17 0.6 Maize and Cassava 76 0.7 Maize, Cassava & Plantain 2 0.9 Maize, Cassava SCocoyam 3 0.6 Maize, Plantain &Coc-oyam 2 1.1 Total 100 0.7 Source: Field Data Note: The mix-cropped farmlands are first cultivated to maize and later intercropped with cassava. 59 Table 3t Farmers' Reasons for Adopting Particular Cropping Pattern Cropping Pattern Reason % of Farmers Monocropping 1. area gets waterlogged and does not allow for cassava cultivation 2. allows for continuous 13 cropping 14 Total 16 Mixed cropping 3. Security against crop failure 4. land suitable for both 55 maize and cassava 10 5. Consume cassava and sell maize for other needs 6 6. Cropping pattern inherited from our fathers 5 7. Land use is maximized 8 Total 84 Source: Field Data 60 It is observed from Table 3 that out of the 17 farmers who monocropped, 13 attributed the practice to a technical constraint. This implies that had it not been the waterlogged nature of the lands, they would have cultivated maize and cassava. In the case of mixed cropping, the major reason given for practising such a system is security against crop failure i.e. in case there is failure of the maize crop, the farmers would at least be left with a second crop. 4.2.1.3 Bush Fallow This is a system where land is left uncultivated for a number of years to allow it to regenerate its fertility before it is cultivated again. This is a common practice in the study area. Data collected on the number of farmers who practise bush fallowing indicates that 89% of the farmers use the system and only 11% do not fallow land (Table 4). It was found that the average number of years that lands are left to fallow in the area is three years, (Table 5). From table 4., 47.2% of the farmers stated 3 years as the period of fallow, 22.5% stated 2 years and 16.8% stated 4 years. 13.5% stated 5 years and above. This distribution shows that the average number of years land is left to fallow in the area is 3 years. This period of fallow has been drastically shortened compared to the fallow periods in the past which could range between 7 and 15 years. With this shorter fallow period, the soils may not fully regain their fertility and this may have negative implications on 61 production levels. It also means that the planning horizon of sharecroppers may be inadequate and this could mean little investment in the land which could result in low productivity. Table 4 j Distribution of Farmers by Reason for Practising or not Practising Bush Fallow Practice Reason % of Farmers Users 1. replenishment of soil nutrients 89 Total 89 2. application of fertilizer and animal manure 3 Non-Users 3. Not easy to acquire land for farming 8 Total 11 Source: Analysed Field Data 62 Table 5: Distribution of Fallow Periods Fallow Period (Years) Frequency % of Farmers 2 20 22.5 3 42 47.2 4 15 16.8 5 5 5.6 6 3 3.4 7 3 3.4 8 1 1.1 Total 89 100 Source: Appendix B. 4.2.1.4 Land Tenure System In the Study Area Information obtained on the land tenure arrangements shows that owner-operation, share tenancy, fixed rent and leasehold systems are present in the study villages. Amongst these arrangements, sharecropping is widely practiced, followed by owner- operation, then fixed rent and lastly leasehold, (Table 6). Fixed rent and leasehold arrangements are not common in the study villages because of unavailable funds to rent or lease farmlands by prospective farmers. It was discovered from the data collected that, farmlands can be acquired from community members, families, chiefs and landowners. Among these sources of land acquisition, community members form the major source of acquiring farmlands by tenant farmers (Table 7). The common mode of acquiring farmland by 63 tenants in the study villages is to provide a drink, usually local gin. in few cases where drinks are not demanded by landowners, tenants are made to pay a token amount in lieu of the drink. Acquiring farmland in the study villages is not a difficult task if the lands are available. The problem is with the length of tenancy which from the data collected is an average of three years after which the farmland should be left to fallow. Normally, the landlords do not specify the period these farmers can farm the land. In few instances, tenants are allowed to farm the land for as many years as the farmers deem necessary. This uncertainty about tenancy period can influence land use decisions by tenants, which may be inimical to land development. Table 6» Distribution of farmers by type Tenurial Arrangement Type of Farmer Groups Number of farmers in each group (*) Cwner-operators 35 S harec ro ppers 50 Fixed-renters (cash) 9 Leaseholders 6 Total 100 Source: Appendix C. 64 Table 7: Percentage Distribution of Farmers by Type of Tenure and Source of Land Acquisition Source Owner Sharecropping Fixed Rent Leasehold Total Community Members - 47 6 6 56 Family 12 1 2 _ 18 Own Land 20 _ _ 21 Chief 3 2 1 _ 6 Total 35 50 9 6 100 Sources: Field Data. In summary, the description on the structure of land use in maize production indicates that most of the farmers operate land sizes less than one hectare, that mixed cropping is widely practiced, that farmers are predominantly sharecroppers and owner operators and that fallow periods are short. Small farm sizes with limited use of improved technology of farming may have adverse implications on output because all things being equal, land area is positively related to output levels. Short fallow periods in the absence of use of fertilizer affects soil productivity and hence output. 4.2.2 Labour Structure Labour is an important input in small-scale agricultural production. This is because the availability of labour determines the farm size in small-scale farming. It is known that small-scale agricultural production relies on family labour and therefore the 65 size of the adult farm family determines in most cases, the size of the family farms. Labour structure is examined in terms of its size (including household and hired labour), age and gender of farmers and type of labour by task. 4.2.2.1 Size of Labour Force Different types and combinations of labour are used for maize production in the study area. In the 1994 growing season, hired labour (ie, by day labour and contract labour), exchange labour or "nnoboa", and family labour were used on the various farms. Family labour is reported to be used by 98% of the farmers (Table 8). Table 8: Type of Labour Used on The Farms Studied Labour Type Percentage of Farmers Employing Labour Type Family labour 98 Hired labour (contact and by day) 75 Exchange labour 9 I Family labour ONLY 18 Hired labour ONLY 2 Family and hired labour ONLY 64 Family and exchange labour ONLY 5 Hired and exchange labour ONLY 7 All types of labour 4 Source: Appendix B. 66 From Table 8, it can be seen that 75 and 9 percent used hired labor and exchange labour respectively. Eighteen percent used only family labor, 2% used only hired labour and none used only exchange labour, sixty-four percent (64%) used both family and hired labour 5% used both family and exchange labour and 7% used both hired and exchange labour. Family labour is the major source of farm labour and exchange or hired labour is used as supplementary labour. Hired labour, comprising of contract and by day labour was rarely used alone by the farmers. Hired labour in most cases was used to supplement the efforts of family labour though there were instances where hired labour employment was higher than family labour. it was observed that hired labour employment was mainly for specific farm tasks such as land clearing which is a strenuous task, and weeding under the crop. Although hired labour was rarely used alone by the farmers, its importance should not be glossed over since it is the second popular form of farm labour used (Table 8). It is observed from Table 8 that, 4% of the farmers interviewed used all forms of labour during the growing period. This small percentage is due to the small number of farmers who exchanged their labour. This implies that exchange labour is scarcely used in the study area. Farmer co-operative were not found in the study area. A look at the average labour supply per hectare on mixed and monocropped farms shows that labour supply per hectare is higher on monocropped farms than on irdx-cropped farms (Table 9). This finding is supported by work done by Kwadzo (19 95) and Mensah 67 (1982) in which they found that the total labour supply per hectare on maize intercropped with cassava was less than the labour supply on maize rronocrop. The supposed reasons are that: (i) on mixed- cropped farms there is less weed population compared to rronocrop farms and as a result, the labour input requirement for controlling weeds is lower on rrdxed-cropped farms and (ii) on mixed-cropped farms, labour input is shared between/among the different crops and therefore the amount of labour input devoted tothe major crop is reduced. On the contrary, on monocrop farms, all the labour input is devoted to the single crop. Information documented by Mensah (1982) on the average labour input per hectare at different locations on small-scale maize farms in Ghana indicates that for maize rronocrop, the average labour input per hectare is 134 mandays. The average labour input per hectare on maize intercropped with cassava is 56 mandays. Comparing these figures i.e. 56 and 134 mandays to the ones obtained for this study i.e. 194 and 287 mandays in Table 9, it is observed that labour was not optimally employed onthe farms studied in this work. This might principally be due to the fact that farmers took longer time in completing specific tasks which could have been completed earlier had there been adequate labour input. Table 9 also shows the distribution of the average labor (hired and family) supply per hectare on mixed and monocropped farms. On the mix-cropped farms, hired labour constitutes 34% of the total labour input and family labour constitutes 66%. Hired labour on the monocropped farms constitutes 2 7% of total labour input and family labour constitutes 73% (Table 9). The presentation in Table 9 indicates that family labour is mostly used on both types of 68 cropping patterns. Kwadzo (1995) and (Atsu et al. 1983) have reported that less than 20% of the total labour input comes from hired labour on maize farms. The results of this study in terms of hired labour input usage differs from that of (Kwadzo, 1995 and Atsu et_ aX., 1983). On both mixed and monocropped farms, the hired labour inputs are 34% and 2 7% respectively which are both higher than the 20% reported by (Kwadzo, 1935 and Atsu et al., 1983). This shows that hired labour is becoming increasingly important in terms of labour usage. Table 9: Average Labour Supply per Hectare and Distribution of Hired & Family Labour Supply per Hectare on Mixed & Monocropped Farms for the 1994/95 Growing Season Type of Cropping Pattern Average Labour Supply in MD/Hec Hired Labour Supply in MD/Hec. Family Labour Supply in MD/Hec. Total in % Mix-Cropping 194 5497 (43%) 10569 (66%) 100 Monocropping 287 1299 (27%) 3574 (73%) 100 Sou res: Analysed data from Appendix P. Family labour is noted to be the major source of labour for the farmers in the study area. It is, therefore, important to have knowledge about the composition of farm family sizes. It can be seen from Table 10 that 82% of the farmers have family sizes between 1 to 4,18% have family size between 5 to 9 and 1% have family size of 10. The average family size is computed to be 3.5. 69 Comparing this average figure to the average family size of 5.1 for rural households in the Eastern region of Ghana as reported in the 1984 Analysis of Demographic Data by the Ghana Statistical Services, it is clear that the family size in the study area is lower than the regional average. It is also important to note that not all the farm household members were engaged in farming during the cropping season. In the Table 10, it is observed that not all farm household members are in farming. In 95% of the cases, children in farm households attend school and only help when they are on vacation. Table 10: Percentage of Household Members Engaged In Farming Family No. of Farm Total % Farm Total % in Farming Size Households Household Household Household (5)(4) x 100 (1) (2) Members (3) Sizes (4) Farmers (5) 1 6 6 1.7 5 83 2 19 38 10.9 32 84 3 29 87 25 82 94 4 27 108 31 97 90 5 10 50 14.3 30 60 6 7 42 12 32 76 7 1 7 2 4 57 10 1 10 2.8 6 60 Total - 348 10 0 288 83 Source: Appendix B. 70 4.2.2.2 Distribution of Type of Labour by Task The production of maize involves a number of activities from land clearing through to harvesting, each of which was undertaken by specific type(s) of labour. Land clearing is considered very strenuous but time specific and so farmers prefer to hire labour to achieve this timely demand. However, due to financial constraints, the farmers try to handle the task themselves. This handicap causes delays depending on the size of the farm. Forty-two percent of the farmers hired labour for land clearing in addition to their own labour. Land clearing is carried out by men. The next task, land preparation, is mainly undertaken by the farmer himself with the help of his wife and sometimes children. Planting which follows land preparation when the rains set in is one of the important tasks on the farming calendar. This farm activity was mainly done by the farm family. In few instances, farmers employed the services of communal labour to complement their efforts. The next farm task is weeding or brushing under the crops. This task is also important since inability to control the weeds on timely basis may affect the yield. This task is considered difficult and requires some skill since the crop can be destroyed if not carefully undertaken. It was discovered that, 75% of the farmers prefer to use weedicide in controlling the weeds because it is considered rrore effective than manual weeding. In 22 cases, where weedicide was applied, the spraying was mostly performed by hired labour. Where weedicide was not applied, about 70.5% of the farm households interviewed performed the weeding by themselves, 19.2% 71 hired labour for the weeding, (Table 11). An estimate of the labour input used in manual weeding reveals that about 25% of the total family labour input was devoted to this task; and 30% of the total hired labour input went in to the same task. These percentages show that weeding is an important task to the farmer. Harvesting ends the direct farm work. This task was undertaken mainly by the farm family. Communal labour services were sought for harvesting. In two instances, only hired labour was used for harvesting. This was only in situations where all farm activities were performed solely by hired labour. After harvesting, the produce are hauled by the same labour doing the harvesting for storage. Table 11s Distribution by Type of Labour for Manual Weeding of Farms Type of Labour Frequency Si by Type of Labour Family 55 70.5 Hired 8 10.2 Family and Hired 15 19 .2 Total 78 99.9 Source: Field Data. 72 4.2.2.3 Age and Gender of Farm Household The Analysed data on age distribution of the farm households shows that 24.3% are aged 19 years and below, 51.7% are within the age group 2 0 - 3 9 years, 21.8% aged between 40-59 years and 2% are aged above 60 years (Table 12). Cumulatively, 76% of the farm household are below 40 years. This age distribution indicates that there are more young people than older and middle aged farm household members in the study villages. The gender composition also shows that 59.4% are males and 40.6% are females (Table 12). The percentage distributions of males and females include adult males and females and male and female children. This percentage gender distribution is consistent with what pertains in the country (GSS, 1995). The young farming population may have positive implications on productivity because it is believed that the younger the farming population, the more productive labour is and consequently higher outputs are obtained (Hill and Ray, 1987). Table 12: Age and Gender Distribution of Farm Households Age Male Female Total & of Total 0 - 9 46 24 70 24 .3 20 - 39 78 71 149 51.7 40 - 59 42 21 63 21.8 60+ 5 1 6 2.0 Total 171 (59.4%) 117 (40.6%) 288 100 Source: Analysed field Data. 73 In summary, some farm activities are labour and gender specific. Family labour was used in undertaking all farm operations but hired labour was employed for specific farm operations. The farm population is young because rrost of the farm hands fall within the economically active age group of 19-40 years. 4.2.3 Structure of Capital The structure of capital inputs is examined in terms of the types and amounts of capital inputs employed. The amounts of the capital inputs is discussed under section 4.3 on proportions of the individual resources. 4.2.3.1 Types of Capital Inputs Capital inputs that the farmers used during the last crop year were fertilizer, seeds both local and improved, weedicide, hoes, cutlasses, baskets, sacks and spraying machine. Cutlass is widely used in land clearing, land preparation and weeding, the number of cutlasses used by the farmers reflected in rrost cases the number of the farm family members who actually worked on the farms. Hoes are used but to a limited extent because the fields do not have many stumps. Spraying machines were used for spraying weedicides. One farmer owns a spraying machine while the others who sprayed weedicide either borrowed or hired the machine. Apart from the spraying machine which was borrowed or hired, all other inputs were owned by individual farmers. With regard to seeds, the improved A varieties used were Obatanpa (15%), Dobidi (3%), the improved 74 varieties used were Obatanpa (15%), Dobidi (3%), AbWPAftPljyX’12%) and Oleomas a (5%). The remaining 65% of the farmers used the local variety. It should be noted that in most of the cases where improved varieties were planted, they were mixed with the local variety in the proportion of 2:1. Table 15 shows the distribution of farmers' reasons for not planting the improved variety of maize. Table 13: Distribution of Farmers' Reasons for not Planting the Improved Variety of Maize Reason Frequency % of Farmers 1. Not readily available and costly 55 55 2 . Their use involves regular maintenance which will require extra labour IS 18 3. Less storable/resistant to infestation 40 40 4. Less tasty 20 20 5. For optimum yield, complementary inputs such as fertilizer and weedicide must be used 10 10 6 . Reliability of the local variety has been tested 10 10 Source: Field Data. 75 The main reasons why the farmers do not use the improved varieties of maize are (i) cost and availability and (ii) because of poor storability and lower resistant nature of the improved varieties to infestation (Table 13). The implication is that high resistant and storable varieties must be developed and must also be affordable and readily available to the farmers. It is also seen from the Table 14 that, use of improved inputs differ among farmer groups. The use of agrochemicals such as weedicide and fertilizer was limited. Out of the 100 farmers interviewed, 22% used weedicide, 7% used fertilizer and 35% used improved seeds. In absolute terms, it can be said that among the improved inputs, improved seed usage is mostly catching on with the farmers. The figures in parenthesis are the ratios of the number of farmers in a given group of farmers who used an input to the total number of farmers in that farmer group. Comparing the ratios among the groups of farmers by tenancy, it is observed that fixed/leasehold farmers have the highest proportion (0.5) of! farmers using weedicide, followed by owner farmers (0.27) and then sharecroppers (0.10). with fertilizer use, the proportions of th^ groups are 0.07 for owner farmers, 0.02 for sharecroppers and 0.2] for fixed/leasehold farmers. The ratios for improved seed use ars 0.71 for fixed/leasehold, 0.41 for owner farmers and 0.19 fo. sharecroppers. The ratios show that, in all three cases of inpu use, fixed/leasehold farmers rank first followed by owner-farmer and lastly, sharecroppers. The ratios seem to imply the sharecroppers tend not to employ improved inputs. But it should I 76 noted that due to the small number of farmers who used these improved inputs in each farmer group, a statistical test of significance between the ratios was not possible. Therefore it cannot be reliably concluded that sharecroppers tend not to employ improved inputs. Table 14: Distribution of Weedicide, Fertilizer and improved Seeds used Among Farmers in the Study District Farmer Group Weedicide Fertilizer Improved Seed Owner-Opera tor 10 (.25) 3 (.07) 16 (.41) Sharecropper 5 (.10) 1 (.02) 9 (.19) Fixed-rent-Leaseholder 7 (.5) 3 (.21) 10 (.71) Total 22 7 35 Source: Appendix C. 4.3 Structure of Resources in Terms of Proportions The section on proportions of resources examines (i) the average total cost per hectare of each resource (ii) shares in the average cost per hectare to each input and (iii) the shares in average cost per hectare to inputs for different landholding groups i.e. owner farmers, sharecroppers, leaseholders and fixed rent farmers. The computed average total cost per hectare of the individual inputs shows that land, labour and cutlass constitute the major cost items (Table 15). 77 Table 15s Average Total Cost per hectare of Inputs Used in Maise Production in 0/hec. Input Average Total Cost/Hec. Land 65625 Labour 44596 Weedicide 8571 Fertilizer 8320 Cutlass 12048 Basket (raphia and cane) 4113 Seed (improved and local) 5730 Sack 2417 Hoe 1947 Source: Appendix D. Table 16 presents the average cost shares per hectare of the inputs. It is seen from the Table 16 that labour and land contribute 37.4% and 37.5% of cost respectively. Cutlass ranks third in terms of cost contribution (12.2%). The rest of the inputs, fertilizer, weedicide, basket, seed, sacks and hoes together constitute 12.8% of average cost. This cost composition shows that land, labour and cutlass are most important inputs to the farmers. Fertilizer, weedicide and improved seeds have little contribution to farmers' production costs. It can be seen from Table 16 that the share of cost per hectare of variable inputs (i.e. labour, cutlass, fertilizer, weedicide, raphia basket and seeds) is 60.4% and that of the fixed inputs (i.e. land, cane 78 baskets, sacks and hoes) is 3 0.6%. The cost sharing between fixed and variables inputs costs show that little investment is made in fixed capital items. Table 16s Average Percentage Share of Inputs in Cost of Production Inputs % Share Labour 37.4 Weedicide 5 Fertilizer 1.7 Cutlass 12.2 Basket Raphia type (1.8) and cane (0.6) Seed Improved (1*3) an<3 local (0.7) Sack 1.2 Hoe 0.3 Land 37.5 Source: Appendix D. Table 17 shows the average percentage cost sharing of the various inputs used by the different groups of sampled farmers in the study area. It is generally observed from the Table 17 that all the farmer groups except sharecroppers, have the highest cost contribution from labour. The cost contribution of labour for owner and leasehold farmers constitute more than 60% of total cost of production. That of fixed rent farmers is 32.2% of their total cost. The percent share of cost of labour for sharecroppers is 22 .6%. 79 Table 17. Average Percentage cost Composition of Various Inputs per Hectare Among Farmer Groups Inputs Owner Farmer Sharecropper Fixed Rent Leasehold Land - 60.4 21.6 14.3 Labour 63.3 22.6 32.2 68.2 Weedicide 9.95 2.3 8.6 1.5 Fertilizer 2 . 3 0.07 13.7 - Cutlass 15.0 11.0 12 .8 9.4 Seed 29 .0 1.0 5.9 3.4 Raphiabasket 2 . 5 1.3 2.6 4.5 Cane basket 1.6 0.3 1.4 0.3 Sack 2.0 0.7 1.3 1.6 Hoe 0.4 0.2 0.4 - Total 10 0 99.9 99.8 100.2 Source: Appendix D. The average cost of land per hectare among the different farmer groups differ and is highest for sharecroppers. This is because the cost of land to sharecroppers is calculated as the value of produce received by the landlord. Owner farmers incur no cost on land ownership since in the study area, owners do not pay any land charges. The estimated percent cost shares of land per hectare per annum for fixed rent and leasehold farmers are 21.6% and 14.3% respectively. Land constitute the second highest cost contributor in their individual groups. Cutlass is an important implement used by the farmers . It was the next highest cost component after labour and land. With owner farmers, cutlass constituted the second highest cost component 80 after land and labour but with the other farmer groups, it is the third highest cost component after land and labour. Comparing the percentage share costs of cutlass among the farmer groups, it is observed that there are no significant differences though the cost contribution is highest for owner farmers, followed by fixed rent farmers, then sharecroppers and lastly leaseholders (Table 17). The agrochemicals used by the farmers are fertilizer and weedicide. It is seen from Table 16 that the cost contribution of weedicide constituted less than a-tenth of the total cost of production in all farmer groups even though variations exist. With regard to fertilizer, the cost contribution for owners is 2.3%, sharecropping (0.07%) and fixed rent farmers (13.7%). Leaseholders did not use any fertilizer. Comparing the cost contributions of the individual inputs of fixed rent farmers, it is observed that the cost contribution of fertilizer was the third highest after the cost of labour and land whereas with owner farmers and sharecroppers, the cost composition of fertilizer were among the lowest cost contributions of the inputs. The cost contributions of seeds in all farmer groups are less than 6%. The cost share for owner farmers is 2.9%, that of sharecroppers is 1%, fixed rent farmers, 5.9%, and leaseholds, 3.4%. of these cost contributions, two-thirds constitutes cost of improved seeds and the remaining one-third from local varieties. These cost contributions of seeds show that the amounts of improved seeds used by the farmers are very small within all farmer groups with the least amount used by sharecroppers (Table 17). 81 The other inputs used are basket (raphia and cane types), sacks and hoes. Their cost contributions are small compared to the other inputs. Aggregating the cost shares of these remaining inputs for the farmer groups, one obtains 6.5% for owner farmers, 2.5% for sharecroppers, 5.7% for fixed rent farmers and 6.4% for leaseholders. With the exception of sharecroppers, there are not much differences in the cost shares among the other farmer groups. Looking at the individual cost contributions of hoe for the farmer groups, it is seen that the shares are almost negligible. This shows that the use of hoes to farm in the study area is low. In summary, the structure of capital inputs employed on the farms studied shows that there is little investment in fixed capital inputs. Employment of output enhancing technological inputs such as fertilizers, planting materials and weedicide was low. With the increasing population and the dwindling land to man ratio in Ghana, it is these improved inputs which could bring about increases in yield Atsu et al. (1983). 4.4 RESOURCE USE EFFICIENCY 4.4.1 Gross Margins Results The comparison of the efficiency in resource use is restricted to sharecroppers and owner-operators although the sampled farmers included leaseholders and fixed renters. This is because, (i) in the literature, the controversy over the efficiency of tenancy systems focuses on sharecropping systems rather than leasehold and 82 fixed rent systems and (ii) sharecroppers and owner-operators formed the majority of farmers studied in this work. The average Gross Margins per hectare and the average Gross Margins per unit of labour between the two groups of farmers were computed. The Gross Margins per unit of the other inputs such as fertilizer and weedicide were not included because of the small number of farmers who used these agro-chemicals in each of the two groups. Table 18 shows that, the average Gross Margins per unit of labour for sharecroppers was lower than that for owner-operators, i.e. 0937 and 0968 respectively. The Gross Margins per hectare was also found to be higher for owner farmers than for sharecroppers (Table 19). But statistical tests of significance (using the t- test) of the difference between the means of the Gross Margins per hectare and Gross Margins per unit of labour between the two farmer groups show no significant differences in the two cases. For the Gross Margins per unit of labour for the two farmer groups, the calculated t-value is 0.57 and the table values at 5% and 10% levels of significance are respectively 2.042 and 1.69 7. The implication is that the difference between the means of the Gross margins per unit of labour between the two farmer groups at both alpha-levels is insignificant. Regarding the test of significance between the means of the Gross Margins per hectare of the two farmer groups, the calculated t-value is 1.04. This t-value is less than the table values of 2.042 and 1.697 at the respective alpha levels of 5% and 10%. This second case also shows no significant difference between their means. These results 83 therefore mean that, in absolute terms, owner farmers used land and labour more efficiently than sharecroppers but the differences in land and labour use efficiencies are not significant between the two farmer groups. This finding corroborates the view held by the proponents of the equal efficiency that there is no difference in resource use efficiency between sharecroppers and owner farmers. The calculated coefficients of variations indicate that there is little deviations of the Gross Margins from the mean which implies that the results can be relied upon. Table 18* Average Gross Margins per Labour Input for Farmer Groups Farmer Group Average Total Value of produce per Unit of labour input in