Abstract
Ethiopia is the second largest wheat producing countries in Sub-Saharan Africa and most people rely on rain fed agriculture for their livelihoods. Wheat production has increased from 2,176,603 tons in 2005 to 4,219,257 tons in 2016 with 51.6% production volume increment. However, this production cannot meet the consumption demand and obliged to import wheat because of rapid population growth. This study intended to determine the technical efficiency of smallholder wheat farmers in Ethiopia. The main objective of study was to examine the effect of demographic, socioeconomic and institutional factors on technical efficiency of small holder wheat farmers in Ethiopia. The study used household level cross sectional data collected in 2015/16 cropping season from 1611 sample farmers selected by multistage sampling technique. A stochastic production frontier and two-limit Tobit regression models were used to estimate level of technical efficiency and identify factors affecting technical efficiency respectively. The study indicated that the average technical efficiency level of wheat producing farmers was 62% implying that there was technical efficiency variation among smallholder farmers in the study area. The result implied that there is an opportunity for wheat producers to increase output at existing levels of inputs with present technologies. By shifting the average farmer to the production frontier, the average yield would increase by 0.5 tons per hectare. The two-limit Tobit regression model results showed that experience of growing wheat, family size, own farm labor, livestock size, extension contact and training had positive and significant effect on technical efficiency. However, distant wheat plot have a negative and significance effect on technical efficiency level of the farmers. This suggests attention to productivity gains arising from efficient use of existing technologies is necessary. Therefore, the study suggested, policies and strategies should be directed towards increasing productivity through improving efficiency of the production process.
Highlights
Several recent studies on the technical efficiency (TE) of crop production for wheat indicated the existence of a yield gap
The results of maximum likelihood estimates (MLE) of variance parameters explain that variance parameter gamma (γ) is the ratio of variance of farm specific technical efficiency to the total variance of output and has a value 0.75 which shows that out of total variation in wheat production 75 percent variation is due to technical inefficiency ui while remaining 25 percent is due to the uncertainty vi
The yield gap of over 2.46 tons per hectare suggests that there is a potential for increasing production and productivity of smallholder wheat farmers
Summary
Developing countries will demand food and account for about 85 percent of the 690 million ton increase in the global demand for cereals between 1995 and 2020 [1]. Efficiency is a very important factor of productivity growth, especially in developing agricultural economies where resources are insufficient and opportunities for developing and adopting better technologies are declining. Such economies can benefit greatly by determining the extent to which it is possible to raise productivity or increase efficiency, at the existing resource base or technology. Several recent studies on the technical efficiency (TE) of crop production for wheat indicated the existence of a yield gap This gap refers to the difference in productivity between best practice farms and other farms that operate with comparable available resources under similar circumstances [3]. It helps to find out whether the yield variability is due to random influences beyond the control of the farmers or to the factors under the control of the farms
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