TECHNICAL EFFICIENCY OF MAIZE PRODUCTION: THE CASE OF SMALLHOLDER FARMERS IN SOUTH ACHEFER DISTRICT OF WEST GOJJAM ZONE, AMHARA NATIONAL REGIONAL STATE, ETHIOPIA

Abstract

The objectives of the study were to analyze the level of technical efficiency and to identify the determinants of technical inefficiency of maize production in South Achefer District of Amhara National Regional State. The study was conducted based on cross-sectional data obtained from a random sample of 155 maize producer households in the District. Parametric approach of stochastic frontier using Cobb-Douglas production function in single stage estimation. Data were collected from published and unpublished documents and from sampled households using a structured questionnaire in secondary and primary data sources respectively. In this study two stage sampling technique was employed to draw 155 sample households. The result showed that area of land allocated, oxen power, amount of DAP fertilizer, human labor and quantity of seed had positive effect on the level of maize output in the study area. The estimation of the frontier model with inefficiency variables shows that the mean technical efficiency of farmers in the production of maize was 80% and ranged between 29% to 98%. This implies that on average maize production can be incrceased by about 20% with a given level of inputs and the existing technology by improving the level of efficieny. The discrepancy ratio, γ, which shows may the variation of output due to technical inefficiency, was about 72.5%. This implies that about 72.5% of the variation in maize output among the sample respondents was due to technical inefficiency effects. The single stage estimation showed that education, age, credit, fertility of land, extension contact, off/non-farm activities and livestock holding significantly affected technical inefficiency of maize production. In the study area the negative coefficient of education, age, credit, fertility of land, off/non-farm activities and extension contact indicates that, improvement in these factors results in significant increase in technical efficiency of maize farmers. Conversely, the positive coefficient of livestock holding reveals that increasing in this factor decreases technical efficiency of maize farmers. Thus, policies and strategies designed to increase the technical efficiency level and food security of the farmers should focus on most important socio-economic, demographic and institutional environment of the farmers