Technical Efficiency of Smallholder Farmers in Ethiopia


Book Description

Accounting for over 40% of GDP, 80% of exports, and 80% of the labor force, agriculture has remained Ethiopian economy's most important sector. Agricultural productivity is very low, owing to institutional failures, degradation of land and soil, land fragmentation and desertification and other external factors such as dependence on rain-fed agriculture, which are beyond the control of the ordinary farmers. Given the challenges of ever-increasing population and declining per capita food production, increasing productivity is the top priority of the Ethiopian economy. In this book, efficiency of smallholder farmers in Ethiopia is analyzed in different farming systems and agro-ecological regions, factors affecting farm households' technical efficiency is also examined. The book also accounts efficiency differentials between smallholder farmers in different regions. The analysis tries shedding some light on policy formulation regarding smallholder farming and should also be an interesting piece for professionals in Agriculture and Economics.




A Comparative Analysis of the Technical Efficiency of Rain-fed and Smallholder Irrigation in Ethiopia


Book Description

Agriculture is the most significant contributor to Ethiopia’s economy. Most of the agricultural production is under rainfed conditions and thus extremely sensitive to rainfall variability. Irrigation development, including smallholder irrigation, is used by the Ethiopian Government to attempt to mitigate the effects of rainfall variability. In this study, we look at smallholder irrigation – modern and traditional irrigation systems. A detailed description of the cropping patterns is given. The stochastic frontier production function approach is used to estimate technical inefficiency, and constraints to production are analyzed. Since the traditional system is found to be efficient but on a lower production frontier, the study shows that significant gains can be made by raising the frontier of the traditional systems and increasing the efficiency of the modern systems. Among the production constraints studied were land preparation, soil fertility, weed control, pests and diseases, soil erosion, input access and moisture deficiency. The most significant constraints on the irrigated systems were input access and moisture deficiency.




The economics of teff: Exploring Ethiopia’s biggest cash crop


Book Description

Considerable poverty and food insecurity in Ethiopia, combined with the overwhelming majority of Ethiopians who depend on agriculture for their livelihoods, make agricultural transformation a crucial development goal for the country. One promising improvement is to increase production of teff, the calorie- and nutrient-rich but low-yielding staple. The Economics of Teff: Exploring Ethiopia’s Biggest Cash Crop examines key aspects of teff production, marketing, and consumption, with a focus on opportunities for and challenges to further growth. The authors identify ways to realize teff’s potential, including improving productivity and resilience, selecting and scaling up new technologies, establishing distribution systems adapted to different areas’ needs, managing labor demand and postharvest operations, and increasing access to larger and more diverse markets. The book’s analysis and policy conclusions should be useful to policy makers, researchers, and others concerned with Ethiopia’s economic development.




Efficiency and Productivity Differential Effects of Land Certification Program in Ethiopia


Book Description

security effects (investment effects) and through more efficient input use due to enhanced tradability of the land (factor intensity effect), empirical studies on the size and magnitude of these effects are very scarce. Taking advantage of a unique quasi-experimental survey design, this study analyzes the productivity impacts of the Ethiopian land certification program by identifying how the investment effects (technological gains) would measure up against the benefits from any improvements in input use intensity (technical efficiency). For this purpose, we adopted a data envelopment analysis–based Malmquist-type productivity index to decompose productivity differences into (1) within-group farm efficiency differences, reflecting the technical efficiency effect, and (2) differences in the group production frontier, reflecting the long-term investment (technological) effects. The results show that farms without a land use certificate are, on aggregate, less productive than those with formalized use rights. We found no evidence to suggest this productivity difference is due to inferior technical efficiency. Rather, the reason is down to technological advantages, or a favorable investment effect, from which farm plots with a land use certificate benefit when evaluated against farms not included in the certification program. The low level of within-group efficiency of farms in each group reinforces the argument that certification programs need to be accompanied by complementary measures such as an improved financial and legal institutional framework in order to achieve the promised effects.




Access to Irrigation Technology and Technical Efficiency


Book Description

Despite its recent remarkable economic growth, Ethiopia remains one of the poorest countries in the world. More than 80 percent of Ethiopians obtain their livelihood from traditional low-productivity agricultural activities. Due to lack of water storage facilities and the erratic nature of rainfalls, most farmers don't have access to water to produce more than one crop per year and hence there are frequent crop failures due to droughts which have made the country one of the highest food insecure nations and receiver of food aid. It is evident that a comprehensive effort is required to increase crop and agricultural production through different intensification and productivity enhancement mechanisms and reduce rural household's food insecurity and poverty. In line with this the Government of Ethiopia and different NGO's have been promoting irrigation technology as a viable option in enhancing farm productivity and efficiency improvements. By integrating field obsei-vations, economic theory, and econometric analysis, this study assess the extent to which access to irrigation technology affects the level of technical efficiency in Gorogutu district of Eastern Ethiopia. The analysis is based on primary household-level data collected from 100 randomly selected households in 20010/11 cropping season. To analyze the effect of the technology on technical efficiency, three different Cobb-Douglas type of Stochastic Production Functions were estimated. More so, to explore different socio- economic and institutional determinants of technical efficiency in the study district, an inefficiency effect model was estimated using the one step procedure.




Technical Efficiency of Sesame Production


Book Description

Master's Thesis from the year 2016 in the subject Business economics - Supply, Production, Logistics, , course: Agricultural Economics, language: English, abstract: This study aimed to analyze the technical efficiency of sesame production in Humera area and to identify major factors that cause efficiency differentials of smallholder farmers. The objective of the study is to measure the technical efficiency of small holder farmers in sesame production. The study was conducted using a cross sectional data collected in 2015/2016-production year from a total sample of 110 households. Cobb-Douglas function was employed to estimate technical efficiency of smallholder farmers in sesame production. The finding of the study indicated that there is inefficiency in the production of sesame in the study area. The estimation of the frontier model with inefficiency variables shows that the mean technical efficiency of farmers is 0.69 (69%). This implies that production of sesame can be increased by 31 percent given the existing technological level. This indicates that the farmers did not using production inputs efficiently in such a way that they give their maximum potential. The estimated stochastic production frontier model together with the inefficiency parameters suggests that any attempt to strengthen technical efficiency of smallholder farmers in the study area must give due attention to the improvement of the principal causes for efficiency differentials such as education, age, extension contact, credit availability, off farm activities and proximity, which were found to be significant determinants of efficiency level. The negative coefficient of educational status, age, credit availability, extension contact and off farm activities means these factors are important in determining the existing efficiency of farmers positively and significantly. While the positive coefficients of proximity indicate that the increments in these factors increase inefficiency. Given the limited resources in the study area will enable the concerned parties engaged in efforts for improvement of the product and productivity of this part of the community to bring about the desired changes in a cost effective way than trying to inject an investment on the production of sesame.







Economic efficiency in wheat production. Analysis of the case of Angecha District, Southern Ethiopia


Book Description

Scientific Study from the year 2023 in the subject Agrarian Studies, , course: Agricultural Economics research, language: English, abstract: Production improvement through the use of improved technologies and increasing efficiency of inputs in cereal production in general and wheat production in particular might be an important alternative to settle food security problem in Ethiopia. Wheat is the first cash crop produced in Angecha District, kembata Tambaro zone, with a total area covered of 4567.5ha. But, the efficiency of producers that they could not use available resources on hand was taken as a great attention. So this study was aimed to analyze the levels of technical, allocative and economic efficiencies of wheat producers; and determining factors for inefficiency in farmers’ wheat production by using cross sectional data from randomly selected 123 households in 2018/19 production year. The study used both primary and secondary data sources and stochastic production frontier approach was used to estimate the level of efficiencies. Ordinary least square estimation was used to identify factors that affect inefficiencies of sample farmers’ in study area. The regression model result indicated that input variables like land and seed were the significant variables to increase the yield of wheat output. 55.63%, 55.47% and 30.85% were the estimated mean values of technical, allocative and economic efficiencies respectively, which indicate the presence of inefficiency in wheat production in the study area. Model result indicated that technical inefficiency positively and significantly affected by sex of the household head, and negatively affected by age, farm experience, land fragmentation, credit access and total livestock unit. Similarly, allocative inefficiency positively and significantly affected by sex and negatively by credit access and total livestock holdings. In addition, economic inefficiency negatively and significantly affected by credit access and total livestock holdings. The policy measures implied from the results include: working further for quality seed and sustainable land management, expansion of gender sensitive and youth based strengthening of the extension services and trainings, strengthening the existing credit institutions services, and expansion of new livestock technologies in the study area.




Cost and Production Functions


Book Description

This study is the result of an interest in the economic theory of production intermittently pursued during the past three years. Over this period I have received substantial support from the Office of Naval Research, first from a personal service consulting contract directly with the Mathematics Division of the Office of Naval Research and secondly from Project N6 onr-27009 at Princeton Univer sity under the direction of Professor Oskar Morgenstern. Grateful acknowledgement is made to the ·Office of Naval Research for this support and to Professor Morgenstern, in particular, for his interest in the puolication of this research. The responsibility for errors and omissions, how ever, rests entirely upon the author. Professor G. C. Evans has given in terms of a simple total cost function, depending solely upon output rate, a treatment of certain aspects of the economic theory of production which has inherent generality and convenience of formulation. The classical approach of expressing the technology of production by means of a production function is potentially less restrictive than the use of a simple total cost function, but it has not been applied in a more general form other than to derive the familiar conditions between marginal productivities of the factors of produc tion and their market prices.