Analysis of factors affecting technical efficiency of smallholder maize farmers in Ethiopia
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Date
2014-04
Authors
Deme, Sorsie Gutema
Journal Title
Journal ISSN
Volume Title
Publisher
University of the Free State
Abstract
Agriculture is the dominant sector of the Ethiopian economy which typically consists of
smallholder rain fed farming systems. Low production and productivity characterises
Ethiopian agriculture resulting in the country being unable to meet the increasing food demand
of its population. As a result, the country continuously faces food insecurity and to some
extent relies on food aid and food imports. The key to growth of agricultural production in
Ethiopia lies in increasing the productivity and efficiency of smallholder farmers. The
Ethiopian government has given substantial policy emphasis to increased productivity of
smallholder crop farmers through the Agricultural Development Led Industrialization (ADLI)
strategy. The ADLI strategy emphasises on increasing the adoption and intensification of yield
enhancing inputs such as fertilisers and improved seeds to boost crop productivity, especially
maize which is the principal crop. In response to the efforts of the development strategy,
substantial improvements in the adoption and utilisation of the yield enhancing inputs have
been observed in maize production; however the maize yield is not showing expected
improvements. The low levels of maize productivity might be the result of technical
inefficiencies existing in smallholder production. Information about the technical efficiency of
smallholder maize farmers at farm level is important for improvements in productivity.
However in Ethiopia this information is limited making an empirical study of the technical
efficiency necessary. The research investigated the factors affecting the technical efficiency of
smallholder maize farmers in Ethiopia with the aim of generating reliable information about
the level of technical efficiency and the factors affecting technical inefficiency of smallholder
maize production. Stochastic Frontier Analysis technique was employed and the data for the
research was secondary data obtained from the Central Statistical Agency of Ethiopia
consisting of 438 observations.
From the empirical estimation, it is found that nitrogen is an important input that can increase
maize productivity significantly. Seed and labour inputs are found statistically insignificant in
explaining maize production. The estimated value of y, which is a parameter used to indicate
the proportion of total variance that is attributed to technical inefficiency is 0.99 and
significant. The value of y revealed that about 99% of the random variation in output of maize
production is attributed to the technical inefficiency component which indicates the importance of examining technical inefficiencies in maize production. The estimated mean
technical efficiency score of the sample is 77% with the minimum and maximum efficiency
scores of 3 to 96%, respectively. The mean technical efficiency implies that on average, the
sampled maize farmers are able to obtain 77% of their potential output using the current
production inputs. The finding suggested the presence of considerable levels of technical
inefficiency that contributed to decreased maize productivity. The farmers have the potential
to increase their maize production by about 23% by using their existing resources and
technology more efficiently. While examining the determinants of technical efficiency, age,
gender, household size, oxen, extension, irrigation, credit, seed type and soil protection were
found to be important factors affecting the technical efficiency of the sampled maize farmers.
The study revealed the possibility of improving the current low maize productivity by
removing the technical inefficiencies. The current level of low technical efficiency can be
addressed through increasing farmers’ access to rural credit and extension services, promoting
soil and land conservation practices and by promoting small-scale irrigation schemes.
Description
Keywords
Productivity, Smallholder farmers, Maize, Technical efficiency, Factors affecting technical efficiency, Stochastic frontier analysis, Corn -- Ethiopia, Farms, Small -- Ethiopia, Agriculture -- Economic aspects -- Ethiopia, Dissertation (M.Sc.Agric. (Agricultural Economics))--University of the Free State, 2014