Stability analysis and technical efficiency of major cereal crops in Ethiopia: a stochastic frontier approach

Abstract

This article is premeditated to perform econometric scrutiny on technical efficiency (TE) of private farm households on cereal crops of Ethiopia. The paper also envisioned to test the instability of cereal crop production/productivity in the country. To analyse the technical efficiency, the authors applied the Cobb-Douglas (C-D) production function on agricultural sample survey data from the Central Statistical Agency (CSA) from 1998/99 to 2013/14. To establish effective and efficient model parameters, we applied more than a few model diagnostic techniques. The estimation results foreseen that, the mean level of technical efficiency of barley, maize, sorghum, Teff, and wheat production in Ethiopia found to be 66.96%, 77.34%, 64.09%, 70.52% and 73.37%, respectively. Correspondingly, the result prophesied that the technical inefficiency is a noteworthy component of the composed error term of the stochastic specification. Age and education level of household, regions and production year found to differentiate farmers in attaining different levels of technical efficiency in major cereal crop production. Therefore, policy makers should give emphasis on these identified factors to improve the technical efficiency of cereal crop production across the country.