​Impact of Policy Change on Technical Efficiency: Evidence from Small Scale Food Crop Farmers in Kellem Wollega, Ethiopia

Abstract

Background: An effort was made by the Ethiopian government to increase the level of technical efficiency of farmers across the country. However, due to climate change, smallholder farmers were facing challenges to increase technical efficiency in crop production. Adaptation to climate change is crucial to uphold and increase food crop productivity. This study analysis the impact of climate change adaptation and policy issues on food crop production efficiency in Kellem Wollega, Ethiopia. Methods: The data was gathered from 400 randomly selected food crop smallholder farmers. The Cobb-Douglas production function was used by including the climate change adaptation measures as explanatory variables in technical inefficiency. Simulation was made to adaption measures that can be influenced by the policy variables to see their impact on the level of technical efficiency. Result: The finding show that the use of adaptive practices (multiple crop type, improved crop varieties, adjusting planting dates and irrigation) had a significant and positive effect on technical efficiency whereas land fragmentation reduces efficiency level. Regarding simulation of policy variables the result show that the mean technical efficiency would increase with rising level of improved crop varieties, adjusting planting dates and irrigation practices. The results of the simulation of land fragmentation climate change adaptation variables show that the mean technical efficiency declines as a result of land fragmentation. Empirical results reveal that with appropriate policy intervention (climate change adaptation measures) the technical efficiency level of food crop farmers can be enhanced.