Abstract
Yield enhancement through increasing efficiency in cereal production in general and in wheat production in particular could be an important way towards achieving food security. This study was aimed at estimating the levels of technical, allocative and economic efficiencies of smallholder wheat producers; and to identify factors affecting efficiency of smallholder farmers in wheat production. A two stages sampling technique was used to select 152 sample farmers to collect primary data pertaining of 2016/17 production year. Both primary and secondary data sources were used for this study. Stochastic production frontier approach and two limit Tobit model was employed. The stochastic production frontier model indicated that input variables such as mineral fertilizers, land and seed were the significant inputs to increase the quantity of wheat output. The estimated mean values of technical, allocative and economic efficiency were 78, 80 and 63% respectively, which indicate the presence of inefficiency in wheat production in the study area. A two-limit Tobit model result indicated that technical efficiency positively and significantly affected by sex of the household head, education, extension contact, off/non-farm activity and soil fertility but negatively affected by land fragmentation. Similarly, age, education, extension contacts and off/non-farm activity positively and significantly affected allocative efficiency. In addition, economic efficiency positively and significantly affected by sex, age, education, extension contact, off/non-farm activity and soil fertility. The policy measures derived from the results include: expansion of education, strengthening the existing extension services, establish and/or strengthening the existing off/non-farm activities and strengthening soil conservation practices in the study area.
Highlights
Agriculture is a centre driver of Ethiopian economy
Economic growth of the country is highly linked to the success of the agricultural sector. It accounts for about 36.3% of the Gross Domestic Product, provides employment opportunities to more than 73% of total population that is directly or indirectly engaged in agriculture, generates about 70% of the foreign exchange earnings of the country and 70% raw materials for the industries in the country (UNDP, 2018).Even though it is contributing a lot to the Ethiopian economy, the agricultural sector is explained by low productivity, caused by a combination of natural calamities, demographic factors, socio-economic factors; lack of knowledge on the efficient utilization of available; and limited resources, poor and backward technologies and limited use of modern agricultural technologies (WFP, 2012)
Different hypothesis tests were made for this study by using the likelihood ratio (LR) test given by Equation (11) following Greene (2003)
Summary
Economic growth of the country is highly linked to the success of the agricultural sector It accounts for about 36.3% of the Gross Domestic Product, provides employment opportunities to more than 73% of total population that is directly or indirectly engaged in agriculture, generates about 70% of the foreign exchange earnings of the country and 70% raw materials for the industries in the country (UNDP, 2018).Even though it is contributing a lot to the Ethiopian economy, the agricultural sector is explained by low productivity, caused by a combination of natural calamities, demographic factors, socio-economic factors; lack of knowledge on the efficient utilization of available; and limited resources, poor and backward technologies and limited use of modern agricultural technologies (WFP, 2012). Wheat straw is commonly used as a roof thatching material and as a feed for animals (Mesfin, 2015)
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