Technical efficiency of smallholder malt barley producers in Tiyo district (Ethiopia)

Yadeta Bekele,Guta Regasa

doi:10.22363/2313-2329-2019-27-3-525-535

Abstract

This study analyzed the determinants of technical efficiency of smallholder malt barley producers and estimated their technical efficiency in Tiyo district of Arsi zone, Ethiopia. Data were obtained from 162 randomly selected malt barley farmers. Descriptive statistics and the translog functional form of the production function simultaneously with single stage estimation approach were used to estimate the production of barley output and technical inefficiency factors. The study revealed that the average technical efficiency of the farmers in the production of malt barley is 71%. This reveals that there exists a possibility to increase the level of malt barley yield by 29% utilizing the existing local technical knowledge of efficient farmers. This further implies that it is possible to produce the same output by reducing current input utilization by 29%. The discrepancy ratio (γ), which estimates the relative deviation of output from the frontier level due to inefficiency, was about 61%. This implies that about 62% of the variation in malt barley production among the sample farmers was credited to technical inefficiency while, the remaining 38% comes due to factors outside the control of farmers. The maximum likelihood parameter estimates showed that malt barley yield was significantly influenced by the amount of fertilizers (DAP and UREA), number of oxen, labour, malt barley seed, herbicide usage and land allocated for malt barley. The stochastic production frontier model shows that experience, education status, number of oxen, land size, and extension contact significantly affected technical inefficiency of malt barley production. Therefore, attention should be given to improve the less efficient farmers following the practices of relatively efficient farmers in the area. On top of this, policies and strategies of the government should give due focus for the determinants of technical inefficiencies in malt barley production.

Highlights

Agriculture still remains to be the major driver of growth of the Ethiopian economy
The stochastic frontier Cobb – Douglas production function depicted that the amount of fertilizers, number of oxen, herbicides and land allocated for malt barley significantly determined production level of malt barley
The mean technical efficiency level of 71% indicates that production can be increased by 29%

Summary

Introduction

Agriculture still remains to be the major driver of growth of the Ethiopian economy This sector contributes to the livelihoods of the community by offering inputs, supplying foods, source of foreign exchange, creating employment opportunities, rising gross domestic product (Ntabakirabose, 2017). It shares about 36% of the GDP, gives employment opportunities to more than 73% of total popula-. Barley is known as the “king of grains” in Ethiopia accounting about 5% of the per capita calorie consumption as a main ingredient in staple foods and local drinks. It is used as substitute for other cereals in the country and serves as a roof thatch for many households (CSA, 2014)

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Conclusion