Determinants of Technical, Allocative and Economic Efficiencies among Onion Producing Farmers in Kobo District, Amhara Region, Ethiopia

Abstract

This study investigated the determinants of technical, allocative and economic efficiencies among small-scale onion farmers in North wollo zone of Amhara National Regional State, Ethiopia. Structured questionnaires were used to collect data from 200 respondents randomly selected from designated locations in the study area. A stochastic production frontier function was fitted to the sample households. The findings revealed that land related factors such as land distance, ownership, and fragmentation explained much of the technical inefficiencies in addition to other socio-economic characteristics of farm households.(age, market access, training access ,years of experience in onion production, farm income, responsibility and field visit)were found to be significant at different levels of significance for technical efficiency. The variables that explained allocative efficiency were plot distance, market access, sources of irrigation water , extension visit, farm income and field visit. Major determinants for economic efficiency were age of the household, plot distance, fertility, source of irrigation water, extension visit, experience in onion production, land fragmentation and farm income. It is therefore suggested that any development intervention program through irrigation should consider the aforementioned socioeconomic characteristics and determinants of efficiency for success. Tenure insecurity and land fragmentation also play significant role for farmers to adopt the available technologies and maximize production on irrigated farms. Likewise, has showed positive effect on production inefficiency, calling for the need to think about policies targeting land consolidation at least with in farms, improving institutional services ( extension, market, training, attitude change on credit utilization ), soil management options and increased investment in irrigation services could jointly contribute to the improvement in efficiency of onion farmers in the study area.

Keywords: Efficiency, Inefficiency, Irrigation, Amhara region, Kobo, Ethiopia