Determinants of allocative and economic efficiency in crop-livestock integration in western part of Ethiopia evidence from Horro district: data envelopment approach

Tolesa Tesema

doi:10.1016/j.heliyon.2021.e07390

Abstract

Sustainable development can be achieved through integrations of livestock and crops farm levels that generate higher economic efficiency in saving production costs through combining of crop and livestock. So, this study analyzed the allocative and economic efficiency of smallholder farmers in mixed crop-livestock production in Ethiopia evidence from Horo district using cross sectional data collected from 152 households in 2019/2020 cropping season by using structured questionnaires’. Data envelopment analysis was used to estimate the allocative and economic efficiency score. From the results of data envelopment analysis mean allocative efficiency was (57.0%) and economic efficiency (38.4%). Thus existence of about 61.6% economic inefficiency in the production of mixed crop-livestock production. Moreover, Tobit regression model results show that allocative efficiency affected by extension, off-non-farm and education levels of household positively. While economic efficiency positively affected by credit use, terrace and extension service positively and distance to the market negatively. Hence government should take steps for the improvement in education levels of household, development of terrace, expansion of nonfarm sectors and reform with extension service.

Highlights

Agriculture is primary economic sector for decreasing poverty and advancing realization of food security in Sub-Saharan Africa (World Bank, 2019)
In orders to improve low agricultural productivity the government of Ethiopia has made real efforts to improve smallholder performance through agricultural extension service programs mainly focused on input supply via credit systems and training for improved crop management recognizing the low productivity of agriculture and the potential contribution of smallholder agriculture to national economic growth and food security (Berhanu, 2009)
Worthiness and yield improvement schemes in the agricultural sector facilitated through proper advance and distribution of available technologies, implementing extension system according to the direction stated and undertaking the challenges which constrained the achievement of potential production capacity and improving the efficiency of the sector (Federal democratic republic of Ethiopia, 2016)

Summary

Introduction

Agriculture is primary economic sector for decreasing poverty and advancing realization of food security in Sub-Saharan Africa (World Bank, 2019) Likewise it plays critical role in Ethiopia's development, providing the output required to feed a growing population, in the industrialization and overall transformation of the broader economy that accounts about 40% of the country's gross domestic product and nearly 70% of its employment (Agricultural Transformation Agency, 2015). In spite of this contribution agricultural productivity is lows, the high dependency on traditional, rain-fed farming in small and fragmented landholdings (African Development Bank, 2016). This study estimate efficiency of resource use in mixed crop-livestock producers by adding more factors such as construction of terrace and integration of off-non-farm activities and considering the integration crop livestock from diversified farming by appling data envelopment approach than only specialized farming household

Methodology

Study area

Output-input variables data

Empirical model

Findings

Conclusion and policy implications