Economic efficiency in maize production in Ilu Ababor zone, Ethiopia
- 1Agricultural Economics, Bedele college of Agriculture and Forestry, Mettu University, Ethiopia
- 2Animal Science, Bedele college of Agriculture and Forestry, Mettu University, Ethiopia
- 3Dept. of Biochemistry, College of Health Sciences, Mettu University, Ethiopia
Res. J. Agriculture & Forestry Sci., Volume 5, Issue (12), Pages 1-8, December,8 (2017)
The agriculture is the backbone of Ethiopian economy, but its performance is unsatisfactory and food production stood at behind the population growth. Improving productivity through introduction of modern technologies and/or improving the efficiency of inputs will be an important alternative to fill the gap between demand and supply. However, as the potential to increase production by obtaining new technologies became more and more limited due to shortage of resource, the efficiency of the farmer that they cannot use the available resources has received the greatest attention. Maize is a leading crop in production and contributes a greatest share in the Ethiopian economy, increasing its productivity and efficiency of inputs in its production could be considered as an important base in bringing food security. Therefore, the current study is aimed at analysing the economic efficiency in maize production in Ilu Ababor Zone of Oromo Regional State using cross sectional data collected from randomly selected 240 sample households during 2014/15 production season. Cobb-Douglas production function was fitted using stochastic production frontier approach to estimate the efficiencies levels, whereas Tobit model is used to identify determinants that affect efficiency levels of the sample farmers. The estimated results showed that the mean technical, allocative and economic efficiencies were 81.78%, 37.45% and 30.62% respectively. It indicated that there was significant inefficiency in maize production in the study areas. Among 13 explanatory variables hypothesised to affect the level of efficiencies, education level of the sample household was the most important factor that found to be statistically significant to affect the level of technical, allocative and economic efficiency all together. Whereas, land fragmentation and soil fertility were the major factors that affect the level of technical efficiency. Besides, land fragmentation, livestock ownership and frequency of extension contact were important factors that affect allocative efficiency of farmers in the study area. The results also further revealed that extension contact was the most important factor that found to be statistically significant to affect economic efficiency. However, the sign of the coefficients for extension contact in allocative and economic efficiencies was not as expected. The result showed that in study area, there is an opportunity to increase the economic efficiency in maize production. Hence, in order to increase the economic efficiency level in maize production, all concerned bodies and stakeholders should give due attention in determining coping up mechanism to significant determinants.
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