Determinants of Productivity and Efficiency of Resettled Farmers in Benishangul Gumuz Region, Ethiopia: A Comparative Analysis of Stochastic Frontier and Data Envelopment Approaches

Abstract

The study measured the extents and principal determinants of productivity and technical efficiency of resettled farm households in Western Ethiopia using 2016 survey using stochastic frontier analysis (SFA) and data envelopment approach (DEA). Multi-stage sampling technique was used to collect data of 285 resettled farm households. Stochastic frontier approach showed that land, labor, local seed, oxen, improved seed and manure having enhanced effect on resettled farmers’ productivity. The mean technical efficiency is found as 0.738 and hence forgone an income of 8,746.53 Birr due to their inefficiency. The mean scale efficiency was found to be 89 %. This reveals an increasing returns to scale nature of production technology. Spearman’s correlation test revealed a significant agreement between SFA and DEA estimation. Tobit model revealed that livestock size, land fragmentation, crop diversification, technology adoption and sharecropping as having significant effect on TE. Therefore, the study recommends government and other concerned bodies to enhance local best farming practices, timely supply of improved inputs in fair price, strengthening mixed farming system, providing trainings and education, encouraging crop diversification, consolidating farm plots, encouraging soil management practices, strengthening tenancy security and providing appropriate health services that lead to boost their food security.

Keywords: DEA, Resettled Farm Households, Productivity, SFA, Technical Efficiency, Ethiopia

DOI: 10.7176/JESD/10-7-10

Publication date: April 30^th 2019