IMPACT OF CLUSTER FARMING ON THE TECHNICAL EFFICIENCY OF MAIZE PRODUCERS IN SILTI DISTRICT, SILTIE ZONE, CENTRAL ETHIOPIA REGION

Abstract

Ethiopian agriculture is largely characterized by small-scale subsistence farming. Maize is one of the main crops in Ethiopia. However, the average yield in Ethiopia is much lower than the global average. To improve this, cluster farming has introduced to transition of farmers from subsistence to marker oriented. Even through various cluster farming schemes are growing the study that shown, the effects of cluster farming on maize technical efficiency are still limited. Therefore, this study was conducted to determine the technical efficiency level of sample households, identify factors affecting farmers' participation in maize cluster farming and its impact on maize technical efficiency in the Silti district, Central Ethiopia. The study was based on primary data collected from 304 respondents selected through multistage sampling procedure, of which 153 were cluster participants and 151 were non-participants. Additionally, secondary data was obtained from various sources. For analysis, both descriptive statistics and econometric models such as Cobb-Douglas stochastic frontier and endogenous switching regressions were employed. The cobb-Douglas stochastic frontier model result showed that labor, fertilizers, chemicals, land size, and oxen-power were significant factors that determine the efficiency level of maize production. The average TE of the sample households was 74.2% and cluster participants had higher mean technical efficiency (82%) than non-participants (66%). The first stage ESR model results show that age, sex, educational level, land size, extension contact, access of information and access of training positively affected the probability of participation while distance from the nearest market was negatively affected. The results from the average treatment effect on the treated indicate that farmers who participated in maize cluster farming had 34.4% more TE compared with counterfactual. For nonparticipants, the treatment effect would increase by 19.7% if they had chosen to participate in maize cluster farming. The findings suggest that promoting cluster farming can be effective strategy to enhance the TE of smallholder maize producers. Thus, government and NGOs should focus on addressing the factors that influence participation in cluster farming.