Production efficiency in agriculture in Nigeria: Do migrant remittances matter?

Abstract

This paper investigates how remittances flow to Nigeria from household migrants affect farm production efficiency of the left behind in rural areas. We used the Living Standard Measurement Survey data set and applied production frontier models to generate production efficiency scores for migrant and non-migrant farm households. Using simple ANOVA and stochastic dominance analysis we test the hypothesis of a negative migrant remittances effect on production efficiency. The mean production efficiency for migrants was higher and statistically significant at p<0.05. We also find a higher technical efficiency across all percentiles for migrant households. Though access to remittances played an important role in the improvement of farmer’s production efficiency, it may not be sufficient as there were observed crosses at some points of the stochastic dominance efficiency curves for migrant and non-migrant households that suggests some possible trade-offs.