Resource Allocation and Efficiency in Nigerian Smallholder Farming Systems: A Review of Empirical Evidence

Smallholder farming systems remain central to Nigeria’s agricultural sector, contributing significantly to food security, rural employment, and national output. However, inefficiencies in resource allocation continue to constrain productivity and limit the sector’s potential. This study reviews empirical evidence on resource allocation and efficiency in Nigerian smallholder agriculture, with the aim of synthesizing methodological approaches, identifying key determinants of efficiency, and drawing policy-relevant insights. The review highlights the widespread application of parametric and non-parametric techniques, particularly Stochastic Frontier Analysis (SFA) and Data Envelopment Analysis (DEA), in estimating technical, allocative, and economic efficiency. Findings from the literature revealed considerable variability in efficiency levels across regions, crops, and farmer groups, with technical efficiency ranging between 40% and 85%, indicating substantial scope for improving output using existing resources. Allocative and economic efficiencies, however, remain relatively low due to market imperfections, poor access to price information, and suboptimal input combinations. Key determinants of efficiency include socioeconomic factors (education, age, and gender), institutional variables (access to credit, extension services, and land tenure security), and technological adoption (improved seeds, fertilizers, and mechanization). Despite extensive empirical work, the review identifies critical gaps, including overreliance on cross-sectional data, limited regional coverage, insufficient gender-disaggregated analysis, and inadequate integration of climate and digital innovation variables. The study concludes that improving resource allocation efficiency in Nigerian smallholder systems requires integrated and context specific interventions. Policy efforts should prioritize access to credit and extension services, promote inclusive and gender-sensitive frameworks, and leverage digital and climate-smart technologies. Additionally, future research should adopt dynamic and interdisciplinary approaches to better capture the evolving nature of agricultural efficiency. Enhancing efficiency in smallholder farming is essential for achieving sustainable agricultural growth, food security, and poverty reduction in Nigeria.