Analysis of Economic Efficiency of Sesame (Sesamum Indicum L) Production in Babogambel District of West Wollega Zone, Oromia Region, Ethiopia

Abstract

The aim of the study was to measure the levels of technical, allocative and economic efficiencies of sesame producers and identify factors affecting them in Babogambel district of Oromia Region, Ethiopia. The study was based on cross-sectional data collected in 2016 production season from 124 randomly selected farm households.  Stochastic production frontier model was used to estimate technical, allocative and economic efficiency levels, whereas Tobit model was used to identify factors affecting efficiency levels. Accordingly, the mean technical, allocative and economic efficiencies of sample households were 75.16%, 72.95% and 53.95%, respectively. The results indicated that there was substantial amount of inefficiency in sesame production in the study area. Land, labor and oxen were the variables that positively affected the production of sesame. Results of the Tobit model revealed that family size, experience in sesame production and non-farm income, Total cultivated land had effect on technical efficiency. On the other hand, experience in sesame production, family size, extension contact affected soil fertility and education level affected allocative efficiency significantly. Education level, experience in sesame production, soil fertility, extension contact affected economic efficiency significantly. Results indicate that there is a room to increase the efficiency in sesame production of the study area.

Keywords: Allocative efficiency, Babogambel, economic efficiency, Tobit, stochastic,