TECHNICAL EFFICIENCY ANDECONOMIC PERFORMANCE OF WOOD PRODUCTION IN IKIRE AREA, IREWOLE LOCAL GOVERNMENT OF OSUN STATE

Abstract

This study evaluated the technical efficiency and profitability of wood marketers in Ikire Local Government Area, utilizing data collected from 90 respondents selected via a multistage sampling method. The goal was to look at the social and economic traits of the marketers, check their costs and profits, figure out how efficient they are in using technology, and find out the main problems they face in their work. To do this, information gathered through detailed questionnaires and used descriptive statistics, budget analysis, and Stochastic Frontier Analysis (SFA) to analyze the data. The results indicated that most respondents were in their active working years and possessed at least a secondary education, suggesting a relatively experienced workforce. The budgetary analysis demonstrated that wood marketing is a profitable business, as total revenue surpassed total costs during the study period. The rate of return on investment ranged from 2.4 to 3.1, confirming that the business generates substantial income. The stochastic frontier results indicated a mean technical efficiency of 0.82, suggesting that marketers operate at 82% of their potential output, with an improvement margin of about 18%. Efficiency levels varied between 0.60 and 0.95, indicating differences among marketers. Input factors like labour, capital, and processing all had a strong positive impact on the output. Labour contributed 0.310, capital contributed 0.401, and processing contributed 0.291. In contrast, getting older made things less efficient, but having more experience and education helped make things more efficient. The main problems found were not enough electricity and high costs for moving things (98.9%), not enough types of wood (86.7%), and not being able to get loans easily (85.6%). The study says that selling wood is still profitable, but it's not as efficient as it could be. It suggests enhancing the power supply, improving credit accessibility, and implementing training programs to boost efficiency