Abstract

The study examined the technical efficiency and observed determinant of technical inefficiency of sawmill in Ogbomoso area of Oyo state.  Multi-stage sampling procedure was employed to select seventy-six (76) saw millers in the study area. Detailed questionnaire was used to obtain relevant information from the respondents. Stochastic production frontier was used to determine the technical efficiency while ordinary least square was used to determine the factors affecting revenue generated by the saw millers in the study area. About thirty-six percent (36%) of the respondents fell within the age range of 51 – 60 years, eighty three percent (83%) were males and ninety two percent 92% engaged in saw milling as the only source of livelihood. The result of the cobb–douglas function showed that sex (P<0.05) and years of experience (P<0.05) in sawmill business had direct effects on the technical efficiency of the saw millers in the study area and they were towards constant returns to scale. In addition, Labour (P<0.1), price per plank (P<0.1) and power (P<0.1) increased the revenue generated by the respondents in the study area. The study concludes that old /obsolete machineries should be replaced, and respondents’ proper training is paramount to an efficient saw milling operation.

Key Words: Sawmill, Technical efficiency, Ogbomoso, Stochastic frontier