TECHNICAL EFFICIENCY, MARKET PARTICIPATION AND FOOD SECURITY OF WHEAT PRODUCERS IN NORTH SHEWA ZONE OF AMHARA REGION, CENTRAL ETHIOPIA

Abstract

The objective of this study is to analyze wheat producers’ technical efficiency, market participation and food security in North Shewa zone of Amhara National Region State, Central Ethiopia. Cobb-Douglas SFP function fitted with inefficiency model was used to estimate productivity and technical inefficiency level of wheat producers. Land size, fertilizer, seed, labor, and oxen power were significantly affecting wheat output. Age, education level, non-farm income, extension contact, and credit services were significant variables affecting technical efficiency of wheat production. The average technical efficiency level of wheat producers was 72%. Heckman's two-step model indicates education levelof head of the family, extension service, livestock owned, distance from market and wheat output significantly affected the probability of market participation decision. Probit regression model indicates age, education level of household head, non-farm income, extension service, wheat output, TE and land size allocated to wheat were significant variables affecting food security. Ordered probit model result indicates age, education level, number of livestock owned, output produced in the cultivation season,TE, quantity of fertilizer used and quantity of wheat sold were significant variables affecting household’s diet diversity. MVT model result shows TE, IMP and CALIN were interdependent. Age, education level, number of livestock owned, extension service and credit access were significant variables simultaneously affecting TE, IMP and CALIN of wheat-producing households. Intervention is needed to reduce technical inefficiency of wheat produces. Policies and strategies which can help farmers to further increase land size allocated to wheat crop can increase wheat output to facilitate market participation and food security of wheat produces. Furthermore, policies and strategies which can encourage farmers’ education, livestock ownership, access to credit, extension and fertilizer favor TE, MP and food security of wheat producers. Keywords: Central Ethiopia, wheat production, technical efficiency market participation,