Journal of Economics and Sustainable Development www.iiste.org ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) Vol.9, No.20, 2018 47 Technical Efficiency in Rice Production Among Smallholder Farmers in Central Liberia: A Stochastic Production Frontier Analysis Joseph Lavela Saysay 1* Damain Mulokozi Gabagambi 2 Gilead Isaac Mlay 2 Isaac Joseph Minde 3 1.Department of Planning and Development, Ministry of Agriculture, P. O. Box 10-9010, Monrovia, Liberia 2.School of Agricultural Economics and Business Studies, Sokoine University of Agriculture, P. O. Box 3007, Chuo Kikuu, Morogoro, Tanzania 3.Michigan State University based at Innovative Agricultural Research Initiative, P. O. Box 3114, Chuo Kikuu, Morogoro, Tanzania Abstract Demand for rice remains high in Liberia with low farm-level productivity (1.2 t/ha). The ability of smallholder rice farmers to improve output levels and attain sustainable production depends on efficient farm practices, hence technical efficiency. A stochastic frontier production function was applied to examine the technical efficiency of rice production. A two stage random sampling with stratification was used to collect data from 400 rice farmers in Bein Garr and Panta Districts, Central Liberia. The study has revealed that technical efficiency among farmers range from 14% to 88%, with the mean of 55%; indicating that on average, the actual output can be increased by 45% in the study area with the available technology and resources. The determinants explaining efficiency variation in the study area were education, farming experience, household size, credit access, group membership and the type of seed used. The study recommends policies that target on increasing and improving farmers’ access to credit so as to enable the farmers get the needed production inputs such as improved seeds and fertilizer on time. Furthermore, farmers should be encouraged to organize themselves into associations/cooperatives around major rice producing and processing hubs. Keywords: smallholder farmers, rice, technical efficiency, stochastic frontier, Liberia 1.0 Introduction Rice is one of the cereals most commonly consumed in the world, especially in Africa and Asia (Ogunniyi et al., 2012). It is one of the world’s major staple food, ranking third after wheat and maize on global production level and second in terms of cultivated area (Nwike and Ugwumba, 2015). Rice is the primary staple food crop for Liberia’s 3.5 million people representing over 33% of their food consumption. It accounts for approximately 50% of adult caloric intake, with an annual per capital consumption estimated at 133kg (USAID-BEST, 2014). The crop is widely grown in almost every region in Liberia due to reliable and favorable climatic conditions (NRDS, 2012). Despite being widely cultivated and the role it plays as a staple food crop in the country, a total annual rice output of about 290,600 metric ton has not kept pace with the growing demand of over 400,000 metric tons, largely due to low productivity and the large deficit is met through importation (NIC, 2015). The average yield in Liberia is just about 1.2 t/ha (USAID-BEST, 2014); which is low as compared to other West African countries with 2.7 t/ha in Ghana, 3.0 t/ha in Côte d’Ivoire, 3.4 t/ha in Mali and 4 t/ha in Benin (Donkoh and Awuni, 2011; Oladele et al., 2011; Donkor and Owusu, 2014). The low productivity at the farm level is a pervasive problem, which impends not only the economic well-being of the farmers but also the efforts by the government to ensure food security. The implication is that if no special attention is given to reverse the situation, the country stands a chance of increasing its importation bills, facing severe food insecurity and negative outcomes from poverty reduction efforts by the government through the pro poor agenda for prosperity and development. Henceforth, it is essential to have clarity on questions like what is the level of efficiency of smallholder rice farmers in the study area? What are the output losses, what are the factors affecting rice production efficiency in the study area and how can these factors be mitigated? These are important policy issues that need to be understood by planners and policy makers. In developing countries, available literature suggests that farmers fail to exploit the full potential of a technology (Ali and Flinn, 1989; Kalirajan and Shand, 1989; Thomas and Sundaresan, 2000; Narala and Zala, 2010; Djokoto, 2012; and Abdulai et al., 2013). Hence, increasing the efficiency in production assumes greater significance in attaining potential output at the farm level. Improvement in technical efficiency is a potential source of further productivity growth. However, embarking on new technologies is meaningless unless the existing technology is used to its full potential, (Narala and Zala, 2010). Further, the analysis of variations between the potential and actual yields on the farm, given the technology and resource endowment of farmers, provide better understanding of the yield gap. Thus, technical efficiency is an indicator of the productivity of the farm and the variation in technical efficiency can reflect the productivity difference across farms. It helps for hunting the potentiality of the existing technology. Therefore, improvement in technical efficiency is the key for meeting the