Abstract:
Teff is one of the dominant cereal crops in Hadero-Tunto Zuria ditrict. However, there was
great productivity difference among the teff producing farmers in the district because of their
efficiency difference in using the existing resource. Accordingly, this study was conducted to
measure the technical, allocative and economic efficiencies of smallholder teff producers and
to identify factors that determining overall efficiencies in the district. Cross sectional data
from 185 randomly selected sample teff producing farmers collected during the 2018/19
production season were used for the analysis. Mulit-stages sampling techniques were used to
select sample respondents. A Cob-Douglas SFP function was used to estimate the level of
technical efficiency and dual cost frontier functions was used to estimate the level of allocative
efficiency. Tobit model was used to identify determinants of technical, allocative and economic
efficiencies differentials among sampled respondents. The mean levels of technical, allocative
and economic efficiencies 70.7%, 62% and 44.3%, respectively. These result implies that there
are possibilities to improve level of technical, allocative and economic efficiency of teff
producing farmers in the study area by 29.3%, 38% and 55.7% respectively with prevailing
resources. The discrepancy ratio gamma (γ) which measures the relative deviation of output
from the frontier level due to inefficiency was about 67.16 %. The SFP function showed that
teff output was positively and significantly influenced by the amount of DAP and UREA
fertilizers, labor force, oxen day, and area under teff plot. The Tobit regression model showed
shows that sex, education status, soil fertility, livestock ownership, off-farm income activities,
training, credit and extension contact negatively and significantly affected economic
inefficiency of farmers. However, farm size and distance to nearest market positively and
significantly affected economic inefficiency. Hence, emphasis should be given to improve the
economic efficiency of teff producing farmers by improving their education, asset ownership,
access to credit, and sharing the experience of economically efficient farmers to inefficient
farmers which help to increase the teff productivity in the area.
