Analysis of the Technical, Allocative, and Economic Efficiencies of Tef Producers in Ejersa Lafo District, Central Oromia, Ethiopia

Abstract

Tef is the most important food and cash crop for more than 70 million people. It is the second-largest crop in terms acreage, but its average productivity is lower compared to other that may arise from different factors. Therefore, this research was intended to assess technical, allocative and economic efficiency of tef producers, and factors affecting technical inefficiency of tef producers using primary data collected from 472 tef producers from Ejersa Lafo district, Oromia, Ethiopia. The result of the stochastic frontier model and Cobb-Douglas production function revealed that the mean technical, allocative, and economic efficiency scores were 80.85%, 88.91% and 71.89% respectively. The result also revealed that all the included production variable; land, labor, fertilizer, chemicals, seed, and size of the plot allotted for tef significantly affected yield per hectare. Moreover, sex, education, experience in tef production, age of the head, distance from farmers’ training center and dependence ratio were the variable significantly affected technical inefficiency of teff producers. The conclusion from these results is that there is a room for farmers to reallocate their resources and achieve higher tef yield per hectare by 19.15%, and minimize their cost of tef production per hectare by 28.11%.

Keywords: Allocative efficiency, Economic efficiency, Stochastic frontier, Technical efficiency, Tef, Ethiopia

DOI: 10.7176/RHSS/12-13-02

Publication date:July 31^st 2022