Comparative Analysis of Economic Efficiency of Irrigated and Rain-Fed Vegetable production in Kersa District of East Hararghe Zone, Oromia, Ethiopia

Kibret Ketema

doi:10.7176/jesd/12-5-04

Abstract

The aim of the study was to compare economic efficiency of vegetable production and identify factors determining efficiencies level of vegetable producers under irrigated and rain-fed conditions in Kersa district of East Hararghe Zone, Oromia, Ethiopia. The cross-sectional data and collected from160farm households (80 irrigation users and 80 irrigation non-users) randomly selected. The Stochastic and Tobit models were used to estimate efficiency levels for both farm groups in the study area. The results of the stochastic frontier model indicate that the mean technical (TE), allocative (AE) and economic efficiency(EE) of irrigation users were 90%, 64% and 58%, respectively whereas the mean technical (TE), allocative (AE) and economic efficiency(EE)of irrigation non-user farm households were 74%, 54% and 40%, respectively. This indicates that irrigation users and irrigation non-users could increase their vegetable production by 10% and 26%, respectively. Alternatively, they can reduce, on average, their cost of production by 36% and 46% for irrigation users and irrigation non-users, respectively. The results of the Tobit model revealed that education level, cooperative membership, farming experience, extension contact and soil fertility status were significantly determined resource use efficiencies of irrigation users and non-users, respectively. Family size positively and significantly affects efficiency of irrigation users, but negatively related with the efficiency of irrigation non-user farm households. The findings show that irrigation users are relatively efficient as compared to irrigation non users, and a high degree of inefficiency for irrigation non users has been reported. Hence, it has been argued that improve efficiency and productivity of the households requires eliminating inefficiency, particular, for irrigation non users by supplementing the rain-fed vegetable production through providing satisfactory institutional support such as rain-water harvesting and soil-water conservation techniques, expansion of irrigation and improved techniques of irrigation should be strengthened and empowered. Moreover, cooperatives and extension services should be strengthened to reduce the knowledge gap in resource allocation for vegetable production. Keywords: Vegetables, Irrigation, Rainfed, Economic Efficiency, Stochastic Frontier, Tobit DOI: 10.7176/JESD/12-5-04 Publication date: March 31 st 2021

Highlights

Agriculture is the mainstay of Ethiopian economy contributing about 40% of the GDP, 72.7% of employment and 81% of the export (UNDP, 2015)
The multi-collinearity test using Variance Inflation Factor (VIF) showed the absence of a severe multi-collinearity in each and in all cases, it was found to be the value of VIF less than 10
The study was designed to estimate and compare efficiency and to examine factors contributing to the variation in efficiency among the irrigation user and non-user vegetable producers in the Kersa district

Summary

Introduction

Agriculture is the mainstay of Ethiopian economy contributing about 40% of the GDP, 72.7% of employment and 81% of the export (UNDP, 2015). Vegetable crops play a significant role in Ethiopia, both in income and social spheres for improving income and nutrition status. It provides employment opportunities as their management being labour intensive. The abundant labor, land and water resources give an opportunity for the production of vegetables both under rain-fed and irrigated conditions (Fekadu & Dandena, 2006). In Ethiopia, the area under vegetable crops was estimated to be 442,276.04 hectares with a total production of 53,001,366.96 quintals in the year of 2017/18. Oromia region has diverse agro-ecology that is suitable for growing vegetable crops, and the area under vegetable crops was estimated to be 176,402.17 hectares with a total production of 21,348,216.86 quintals in the year of 2017/18 (CSA, 2018)

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