Technical Efficiency of Malt Barley Production in Malga District of Southern Ethiopia

Adane Edao Shate

doi:10.7176/isde/12-1-03

Abstract

This study was conducted to assess the technical efficiency of malt barley production in Malga District of southern Ethiopia using cross-sectional data. Three stages sampling technique was applied to draw 186 sample farmers randomly. The interview schedule was pre-tested before conducting the actual data collection; data gathered from the sample households with the help of trained enumerators. In addition, secondary data were collected through review of relevant documents sources. Descriptive statistical analysis such as mean, standard deviation, minimum, maximum, frequency and percentage were used to analysis basic household characteristics. Cobb-Douglas stochastic frontier production function model was used to estimate technical efficiency and determinants of technical efficiency differentials in malt barley production. Maximum likelihood estimation results implied increasing input variables (area, seed, oxen, fertilizer and labour) would increase yield of malt barley production. The coefficients of elasticity of area, seed, oxen, fertilizer and labour were 0.88, 0.056, 0.033, 0.032 and 0.0125 respectively under malt barley. Consequently, malt barley exhibits increasing returns to scale as the sums of input elasticity were greater than one which is 1.018. The discrepancy ratio, γ, was about 0.67 indicating that about 67% of variation in malt barley yield among the sampled farmers was attributed to technical efficiency effects. The mean technical efficiency of sampled farmers in the production of malt barley was 0.82. The estimated stochastic production frontier model with the inefficiency variables implies that education, experience, extension and livestock positively and significantly affected technical efficiency of malt barley production. Hence, emphasis should be give to improve technical efficiency level of those less efficient farmers by adopting the practices of relatively efficient farmers in the area. Beside this, policies and strategies of the government should be directed towards addressing the implication of statistically significant policy variables. Keywords: Technical efficiency, Cobb-Douglas stochastic frontier, Malt barley, Malga. DOI: 10.7176/ISDE/12-1-03 Publication date: January 31 st 2021

Highlights

Ethiopia, the country with an area of about 1.12 million square kilometres and with an estimated population of about 102.37 million is the second populous nation in Africa (CSA, 2017)
Descriptive statistics for discrete variables The study revealed that 87.10% of the sampled farmers were male headed household while the reaming 11.83% were female. This implies that malt barley production is dominated by male household head in the study area
This study analyzed the technical efficiency of malt barley production in malga District of southern Ethiopia using farm household level data collected from 186 households in 2016/2017 production year

Summary

Introduction

The country with an area of about 1.12 million square kilometres and with an estimated population of about 102.37 million is the second populous nation in Africa (CSA, 2017). This growing population requires better economic performance than ever before at least to ensure food security and sustainable livelihood. The major Ethiopian users of malt are the domestic breweries. Their annual demand has not so far been met by the local malt supply, and the breweries have long been dependent on heavy importation (Sultan and Adamu, 2017)

Methods

Results

Conclusion