Technical Efficiency in Honey Production: The Case of Illubabor and Buno Bedelle Zones, South Western Ethiopia

Abstract

The gap between demand for and supply of food can be reduced by improving productivity either through introduction of modern technologies or improving the efficiency of inputs. However, in developing countries like Ethiopia, improving the efficiency of inputs has received the utmost attention. As production of honey is a significant contributor to the Ethiopian economy, increasing production and productivity of inputs in honey production could be taken as an important step in attaining food security. Therefore, this study was aimed at analyzing the technical efficiency in honey production in Iluabbabor and Bunno Bedelle zones using cross sectional data collected from randomly selected 180 sample households during 2017/18 production season. Cobb-Douglas production function was fitted using stochastic production frontier approach to estimate technical efficiency levels, whereas tobit model was used to identify factors affecting technical efficiency levels of the sample farmers. The estimated results showed that the mean technical efficiency was 51.05% that indicated there was significant inefficiency in honey production in the study areas. The discrepancy ratio (γ), which measures the relative deviation of output from the frontier level due to inefficiency, implied that about 51.05% of the variation in honey production was attributed to technical inefficiency effects. Among factors hypothesized to determine the level of technical efficiency, family size, hive size and experience of household head in honey production were found to determine technical efficiency of farmers positively while distance of household head from the nearest market had negative impact with technical efficiency. The result indicated that there is a room to increase the efficiency of honey producers in the study areas. Hence, the efficiency level of less efficient farmers should be improved by adopting the practices of relatively efficient farmers in the area.

Keywords: honey, efficiency, Cobb-Douglas, stochastic frontier, tobit

DOI: 10.7176/JAAS/67-03

Publication date:August 31^st 2020