Technical efficiency of salt production in Ghana, the case of small-scale salt producers in Elmina

Abstract

Technical efficiency of resource-use, particularly in salt production is a major concern for the level of productivity and profitability of salt miners depend on it. Thus, the study was conducted to estimate the level of technical efficiency among small scale salt producers in Elmina. The study used the entire population of 96 salt producers in Elmina. The study reveals that, Cobb-Douglas stochastic production frontier best fits small scale salt producers in Elmina. The results of the mean technical efficiency reveal that, small scale salt producers were not fully technically efficient as the mean technical efficiency is 37.8%. Among the five (5) salt socio-economic variables employed, the technical efficiency model indicates that the number of ponds is statistically significant at 1%, but inversely correlated with technical efficiency. However, the coefficient of interest paid on loans is negative but significant at 5%. Moreover, level of education and distance from the campsite to homestead are significant at 10% levels and positive. The results of the study suggest that, number of ponds and interest paid on loans play an integral role in increasing the level of technical efficiency among small-scale salt producers in Elmina. The major recommendations of the study include Government, Minerals Commission and District Assembly should liaise with various financial institutions to provide interest free loans or loans at affordable interest rate to small-scale salt producers to undertake capital and labour investment as a panacea for increasing efficiency. Also, the Minerals Commission, District Assembly and chiefs should educate the small-scale salt producers on the need to develop and mine few walls (ponds) since they are under resourced. This will help improve on the technical efficiency among the small-scale salt miners in Elmina.