TECHNICAL EFFICIENCY IN TEFF PRODUCTION: THE CASE OF SMALLHOLDER FARMERS IN JAMMA DISTRICT, SOUTH WOLLO ZONE, ETHIOPIA

Abstract

Teff is one of the dominant crops and its productivity is low in the study area. This means that it is possible to obtained additional output from existing inputs used, if resource are properly used and efficiently allocated. The aim of this study was to determine the level of technical efficiency of smallholder teff producers and identify factors affecting technical efficiency of smallholder farmers in teff production of Jamma district, South Wollo Zone, Ethiopia. A three-stage sampling technique was employed to select 149 sample farmers who were interviewed using a structured schedule to obtain data pertaining to teff production during 2015/2016 production year. A Cobb-Douglas stochastic frontier production analysis approach with the inefficiency effect model was used to estimate technical efficiency and identify the determinants of efficiency of teff producing farmers. The maximum likelihood parameter estimates showed that teff output was positively and significantly influenced by area, fertilizer, labor and number of oxen. This would mean that there is a room to increase teff output from the existing level if farmers are able to use these input variables in an efficient manner. The result further revealed that there were significant differences in technical efficiency among teff producers in the study area. The discrepancy ratio, which measures the relative deviation of output from the frontier level due to inefficiency, was about 75.6%. This implies that about 75.6% of the variation in teff output among the sample farmers was attributed to technical inefficiency effects. The estimated mean levels of technical efficiency of the sample farmers were about 78%. This shows that there exists a possibility to increase the level of teff output by 22% through efficiently utilizing the existing resources. The estimated stochastic production frontier model together with the inefficiency parameters showed that, age, education, improved seed, training and credit were found to have negative and significant effect on technical inefficiency while farm size was found to have positive and significant effect on technical inefficiency of teff production. Hence, local government should provide necessary supports such as formal as well as informal education, training, credit, improved seed and timely supply of fertilizer.