Allocative Efficiency of Small¬holder Wheat Producers in Damot Gale District, Southern Ethiopia

Abstract

The study assessed allocative efficiency levels of wheat producers in Damot Gale district of southern Ethiopia using cross-sectional data obtained from 123 randomly selected farmers in 2015 production year. To achieve this objective, a stochastic frontier model and OLS regression model were employed in the analysis. It was recognized that the mean allocative efficiency was 49.26% and it was significantly influenced by off-farm income, time of sowing, row planting, credit access and proximity to homestead. Policy implication of this study was that there is potential for farmers to increase wheat production by adopting projects or programs that would support off/non-farm income activities, awareness creation on efficient allocation of resources, strengthening awareness creation on row planting. In general there is a need to intervene not only in facilitating access to credit but also adopting risk and loss management policy and strategy like saving for insurance. Strengthening of extension training services about row planting for efficient resource allocation which helps to improve efficiency and productivity.

Keywords: Allocative efficiency, Stochastic frontier approach, Damot Gale, Ethiopia