Technical Efficiency of Wheat Producers in North Shewa Zone of Amhara Region, Central Ethiopia

Tadesse Getachew,Degye Goshu,Degnet Abebaw,Mengistu Ketema

doi:10.5539/sar.v9n3p77

Tadesse Getachew, Degye Goshu + Show 2 more

Open Access

https://doi.org/10.5539/sar.v9n3p77

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Abstract

The aim of this study is to analyze technical efficiency of wheat producers and identifying the sources of inefficiency in North Shewa Zone of Amhara National Region State, Central Ethiopia. A multi-stage sampling technique was used to select sample respondent households. In the first phase, three potential wheat grower districts namely, Bassona Worrana, Siyadebrna Wayu, and Moretna Jiru were selected purposively. In the second stage, six potential kebeles (lowest administrative level), two from each of the three districts were selected. In the third phase, proportionally with population size, 374 sample households were selected using simple random sampling techniques from each of the selected kebeles. Cobb-Douglas Stochastic Frontier Production (SFP) function and inefficiency function were used to estimate the technical inefficiency level of wheat producers using a one-step maximum likelihood estimation procedure. The average productivity of wheat was found to be 32.60 quintals per hectare. Land size, fertilizer, seed, labor, and oxen power were important factors of production positively and significantly affecting wheat output. Age and education level of a farmer, off-farm income, extension contact, and credit services were found negatively and significantly affecting the technical inefficiency of wheat producing farmers. The inefficiency components contributed about 70.62% of the total deviation from the best possible production output. The average technical efficiency (TE) level of wheat producers was 72%. Overall, the provision of fertilizers, credit, and extension services would make wheat producers more productive and technically efficient in the study area.

Highlights

Agriculture contributes about 37% of the national Gross Domestic Product (GDP), 73% of rural employment, and 70% of export earnings for the Ethiopian economy (FAO, 2019)
The zone is located between 8° 38’ to 10°42' N and 38°40' to 40°03' E and it consists of 22 rural districts (North Shewa Zone Department of Communication Affairs, 2018)
Before testing the fitness of the models the data was checked for multicollinearity and heteroscedasticity problems and there were no serious problems found in the data

Summary

Introduction

Agriculture contributes about 37% of the national Gross Domestic Product (GDP), 73% of rural employment, and 70% of export earnings for the Ethiopian economy (FAO, 2019). Wheat is an important food crop in Ethiopia. It accounts for 14 percent of the total caloric intake of consumers in Ethiopia (World Bank, 2018; Minot et al, 2015). Wheat is cultivated in the highlands of Ethiopia, mainly in Oromia, Amhara, Southern Nations, Nationalities and Peoples (SNNP) and Tigray regions. In Ethiopia, wheat production by volume has increased over the past decade. In the 2018/2019 cultivation year, 4.8 million metric tons of wheat was produced and its productivity was 27.64 quintals per hectare at the national level (CSA, 2019). According to the Global Agriculture Information Network (GAIN, 2019) estimation, the demand for wheat for 2019/20 is about 6.3 million metric tons

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