ECONOMIC EFFICIENCY OF SMALLHOLDER MAIZE FARMERS IN SHENAN DUGO DISTRICT, WEST HARARGE ZONE, OROMIA NATIONAL STATE, ETHIOPIA

Abstract

Maize is one of the most widely grown crops in the Shenan Dugo district of the West Harerghe Zone. There was a great productivity difference among the farmers because of their efficiency difference in using the existing resource. The objectives of the study aims to analyze the level of TE,AE and EE and its the determinants of Economic efficiency of maize production in Shenan Dugo District, Oromia Regional State. This study was conducted based on cross sectional data obtained. It’s used both primary and secondary data were used for this study. Primary data were gathered from randomly selected 196 sample households during the 2022 production season. Descriptive statistics and econometric models were used to analyze data. A Cobb-Douglas stochastic frontier production function and dual cost Cobb-Douglas functions were used to estimate technical, allocative and economic efficiencies of Maize production respectively. Two-limit Tobit model was used to identify the major factors that determine technical, allocative and economic efficiencies of Maize producing farmers. The study also revealed that the mean levels of TE, AE, and EE were, respectively, 83.8197%, 80.758%, and 67.74%. The estimated results showed that the mean technical, allocative and economic efficiencies were 88.98%, 83.41% and 74.31%, respectively. The result of the two limit Tobit model shows that the technical efficiency of maize-producing farmers is determined by Sexe of Houshold, extension contact, credit access, training were discovered to have a statistically significant and posetively impact on the level of technical efficiency. Additionally, the data showed that the study's area's smallholders' Allocative efficiency had a significant effect by, Educational status,Improve Seed, Agro-ecology and Extaintion contact was positively and significant on AE. But off/onfarm, and distances from nearest Market was negatively and significant with the study area's smallholders' Allocative efficiency. The EE of farmers was affected by Educational stataus , land fragmentation, Improve seed, soil fertility, extension contact, Credit access,Trainining and Training were important factors that affect the economic efficiency of farmers in the study area. But Agro-ecology, off/onfarm, and distances from nearest Market, was negatively and significant with economic efficiency. This implies that there is great potential to increase the growth maize output with the existing resource based on technology. Thus, policies and strategies designed to increase the Economic efficiency level of the farmers should focus on most important socio-economic, demographic and institutional environment of the farmers.