Technical Efficiency of Red Pepper Production: The Case of Dalocha District, Southern Ethiopia

Degineh Lagiso

doi:10.7176/iel/10-1-01

Abstract

Increasing the productivity of red pepper is important to meet the need of ever increasing population. However, farmers faced the problem of productivity due to the lack of knowledge on how to maximize level of output at a given level of inputs. The objective of this study was to assess the technical efficiency of red pepper production in Dalocha district of southern Ethiopia. Cobb-Douglas stochastic frontier model was used to estimate the technical efficiency and its determinants in red pepper production. Maximum likelihood estimation results showed that increasing input variables (oxen power, seed, labor and fertilizer) would increase yield of red pepper. The discrepancy ratio,γ, which measures the relative deviation of output from the frontier level due to inefficiency was about 85 percent indicating that about 85% of variation in red pepper yield among the farmers was attributed to technical inefficiency effects. The mean technical efficiency of farmers was about 80%. The implication is that, there is an opportunity to improve technical efficiency among farmers on average by 20% through efficient use of inputs. Thus, it is possible to improve technical efficiency through utilizing available inputs wisely. Keywords: Red Pepper, Technical Efficiency, Cobb-Douglas stochastic frontier. DOI : 10.7176/IEL/10-1-01 Publication date: January 31 st 2020

Highlights

Red pepper is cash crop for many developing countries, such as Ethiopia, Nigeria, Ghana, China, India, Pakistan, Bhutan, Indonesia, Cambodia and Thailand (Shih-wen et al, 2013)
Estimation of parameters of SPF model In this study, five input variables were used for estimation of the frontier production function which includes the land area allocated to red pepper farms in hectare, oxen power utilized in oxen-days, seed in kilogram, fertilizer used (Dap and Urea) expressed in kilogram and labor utilized in man-days
The focus of this paper was to assess the technical efficiency of red pepper production in Dalocha district, Southern Ethiopia

Summary

Introduction

Red pepper is cash crop for many developing countries, such as Ethiopia, Nigeria, Ghana, China, India, Pakistan, Bhutan, Indonesia, Cambodia and Thailand (Shih-wen et al, 2013). Investment in pepper production is viable enterprise for income generation, poverty alleviation, job creation and improvement of food security to every household (Mohammed et al, 2015). The study shows that pepper is the world’s second important vegetable ranking after tomatoes. It is the commonly produced type of spice, flavoring and colouring to food while providing essential vitamins and minerals and has substantial nutritional value (Mussema, 2006). It is leading vegetable and spice in Ethiopia (CSA, 2016). Ethiopia has a favourable climatic and soil conditions for pepper production. The most commonly grown types are Mareko Fana, a pungent long chilli of dark-red smaller mitmita, chillies, hot, red and small pepper (Herms, 2015)

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Conclusion