Abstract
This study analyzed the economic efficiency of smallholder farmers in barley production in the case of Meket district, Amhara National Regional State, Ethiopia. A cross sectional data collected from a sample of 123 barley producers during the 2015/2016 production season was used for the analysis. Two stages random sampling method was used to select sample respondents. The translog functional form was chosen to estimate both production and cost functions and OLS estimation method was applied to identify allocative and economic inefficiencies factors, while technical inefficiency factors were analyzed by using single stage estimation approach. The estimated stochastic production frontier model indicated input variables such as fertilizer, human labor and oxen power as significant variables that increase the quantity of barley output, while barley seed had a negative effect. The estimated mean levels of technical, allocative and economic efficiencies of the sample farmers were about 70.9, 68.6 and 48.8%, respectively which revealed the presence of a room to increase their technical, allocative and economic efficiencies level on average by 29.1, 31.4 and 51.2%, respectively with the existing resources. Among the hypothesized factors expected to affect technical, allocative and economic inefficiencies, extension contact and number of barley plots significantly and negatively affected all inefficiencies level. Besides, distance of residence from the nearest main market was found to have a positive and significant effect on all inefficiencies of sampled farm households. Hence, emphasis should be given to decrease the inefficiency level of those more inefficient farm households via experience sharing among the better of farmers and usage of improved or certified barley seed. Besides this, policies and strategies of the government should be directed towards increasing farmers’ education, improve the system of input distributions and institutional facilities. Key words: Economic efficiency, stochastic frontier, trans-log, ordinary least square, Meket, barley.
Highlights
Ethiopia is ranked 21th in the world in terms of barley production with a share of 1.2% of the world’s total production and the second largest barley producer in Africa, next to Morocco and followed by Algeria (Abu and Teddy, 2014; FAO, 2014)
The general objective of this study was to analyze the economic efficiency of smallholder farmers in barley production, the case of Meket district, Amhara National Regional State, Ethiopia and to identify the determinants of inefficiencies of barley producers in Meket district
The value of gamma is 63% which indicated that there was technical inefficiency. This mean that in the study area barley production is more affected by those factors under the control of the farmers than other variables beyond the control of the farmers like climate related factors
Summary
Ethiopia is ranked 21th in the world in terms of barley production with a share of 1.2% of the world’s total production and the second largest barley producer in Africa, next to Morocco and followed by Algeria (Abu and Teddy, 2014; FAO, 2014). Barley accounts for about 5.6% of the per capita calorie consumption as a main ingredient in staple foods and local drinks. It is a substitutable crop for other cereals in the country and serves as a roof thatch for many highlanders (Berhane et al, 2011; CSA, 2014)
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