Analysis of Price Efficiency of Smallholder Farmers in Maize Production in Gudeya Bila District, Oromia National Regional State, Ethiopia: Stochastic, Dual Cost approach

Abstract

Even if Ethiopia had adopted different strategy and policies the productivity of agricultural production is not as meet the demand of the peoples. The aim of this study was to analyze productivity and price efficiency of smallholder farmers in maize production in the study area. To meet the stated objectives primary data were collected using structured questionnaires from 154 randomly selected sample households during the 2017/18 production year. Copdoglous production function was applied to analysis productivity where as dual cost is used to estimate price efficiency. Tobit model was used to identify factors affecting price efficiency level. Price efficiency were 70.06%. Thus the results reveal exists considerable levels of price inefficiencies in maize production in study area. The Tobit model results revealed that livestock holding and participation in off/non-farm activities had positive effect and distance of maize plot from home were found to had negative effect on price efficiency The result indicated that there exists a room to increase the price efficiency of maize producers in the study area. For realizing significant price efficiency gains policies and strategies of the government should be directed towards increasing farmer’s livestock holding and promoting off/non-farm activities. Keywords: Dual cost, Cobb-Douglas, Tobit DOI : 10.7176/JNSR/9-8-02 Publication date : April 30 th 2019