Abstract

This study is aimed at evaluating the efficiency of timber processors in Ondo State, Nigeria, using Data Envelopment Analysis. Multi stage sampling technique was used to select two Local Government Areas with the highest number of sawmills, from each of which twenty saw millers were randomly selected, given a total of forty saw millers. Based on Constant Return to Scale Technical Efficiency, 35% of the saw millers were technically efficient while on the basis of Variable Return to Scale TE, 60% of the saw millers were technically efficient. About 35% of the saw millers were scale efficient. The Data Envelopment Analysis output revealed that 35% of the sampled saw millers were both technically and scale efficient and were hence operating at the most productive scale size. About 65% of the saw millers were operating at sub-optimal condition. Excesses in input utilization were observed in respect of total fixed cost, costs of electricity, servicing of mill, timber from forest reserve and operation of truck; and remuneration of labour. The inefficient firms should be encouraged to emulate the operating practices of the most productive firms so as to improve their performance.

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