Analysis of Levels and Determinants of Technical Efficiency of Teff Producing Farmers: The Case of East Gojam Zone, Amhara Region, Ethiopia

Abstract

This study explores Technical Efficiency level of smallholder teff production and also investigates socioeconomic determinants explaining the variation in Technical Efficiency among smallholder teff farmers using 396 random sample farm households in East Gojam Zone of Amhara regional state, Ethiopia. Cobb-Douglas Stochastic Frontier Model was fitted to estimate farm level technical efficiency and the associated efficiency scores since the function has been one of the most widely used models among the potential algebraic forms of production function in most empirical studies of agricultural production analysis. Both Maximum Likelihood (ML) and quantile regression (QR) techniques were employed to conduct the analysis of technical efficiency determinants. And the study revealed that a one % increase in the input level of plot size, seed, fertilizer, man-days and oxendays respectively produce a return of 0.30, 0.11, 0.02, 0.28 and 0.14% increase in output, keeping all other factors constant. In general, the result had underlined farmer’s opportunity to boost their productivity by optimizing the level of the inputs they are using. On this study the mean levels of the actual and potential output during the production year were 14.00 qt/ha and 21.07 qt/ha and, hence, with 7.07Qt/ha yield gap. Therefore, the ratio of the average yield gap to the average actual yield entails the possibility to increase the average plot level output by 50.5% through improving producers TE under the prevailing production input and technology level. The study also identified that farmers with more fertile plots are technically efficient as compared to those who cultivate marginal lands, keeping all other factors constant. Besides, those teff farmers who use compost have lower inefficiency as compared to those farmers who do not utilize compost in the study area. Moreover, education level influenced efficiency of teff farmers positively. Therefore, the study recommends the concerned bodies to give emphasis to promote education, and to have integrated soil fertility management policy targeting soil fertility enhancement to move the marginalized smallholder farmers TE closer to the frontier.

Keywords: Technical efficiency, Stochastic frontier model, Quantile regression, Teff, Amhara, Ethiopia

DOI: 10.7176/JESD/13-9-02

Publication date:May 31^st 2022