Agricultural Technical Efficiency of Smallholder Farmers in Ethiopia: A Stochastic Frontier Approach

Markose Chekol Zewdie,Steven Van Passel,Jan Nyssen,Enyew Adgo Tsegaye,Michele Moretti,Amare Sewnet Minale,Daregot Berihun Tenessa,Zemen Ayalew Ayele

doi:10.3390/land10030246

Markose Chekol Zewdie, Steven Van Passel + Show 6 more

Open Access

https://doi.org/10.3390/land10030246

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Abstract

In the past decade, to improve crop production and productivity, Ethiopia has embarked on an ambitious irrigation farming expansion program and has introduced new large- and small-scale irrigation initiatives. However, in Ethiopia, poverty remains a challenge, and crop productivity per unit area of land is very low. Literature on the technical efficiency (TE) of large-scale and small-scale irrigation user farmers as compared to the non-user farmers in Ethiopia is also limited. Investigating smallholder farmers’ TE level and its principal determinants is very important to increase crop production and productivity and to improve smallholder farmers’ livelihood and food security. Using 1026 household-level cross-section data, this study adopts a technology flexible stochastic frontier approach to examine agricultural TE of large-scale irrigation users, small-scale irrigation users and non-user farmers in Ethiopia. The results indicate that, due to poor extension services and old-style agronomic practices, the mean TE of farmers is very low (44.33%), implying that there is a wider room for increasing crop production in the study areas through increasing the TE of smallholder farmers without additional investment in novel agricultural technologies. Results also show that large-scale irrigation user farmers (21.05%) are less technically efficient than small-scale irrigation user farmers (60.29%). However, improving irrigation infrastructure shifts the frontier up and has a positive impact on smallholder farmers’ output.

Highlights

Irrigation farming has come a long way since it was first conceived 8000 years ago
The results reveal that the estimated first-order coefficients of all the three inputs have the expected positive signs, and only two of them (Land and Capital) have a statistically significant effect on crop production in the study area at 1 and 5% significance levels, respectively
Using a technology-flexible stochastic frontier approach in which we considered both observed and unobserved heterogeneity, this study investigated the performance of smallholder farmers with different farm system types (LSIU, SSIU and NU farmers) in Ethiopia, focusing on the degree of technicalefficiency and its determinants

Summary

Introduction

Irrigation farming has come a long way since it was first conceived 8000 years ago. For thousands of years, irrigation farming was used by ancient civilizations to provide water to the farm plots, and this farming technique remains an important agricultural practice across the globe. The share of irrigated land ranges widely, from 4% of the total area cropped in Africa to 42% in South Asia. There is high potential, irrigation farming in Africa is not as developed as in Asia. Ethiopia has abundant water resources and has some of the largest fresh surface water resources of all countries in Africa south of the Sahara. This large water resource potential for irrigation development is important for improving the performance of the agricultural sector. Ethiopia has an irrigation potential of 5.3 million ha of land, of which 3.7 ha can be developed for irrigation farming using surface water sources [4]. Poverty remains a challenge, and over 22 million people are living below the national poverty line [6]

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