Abstract

Abstract - Ethiopian agriculture is known for low productivity. Productivity could be enhanced by perfecting the state of technology or enhancing the efficiency of producers and helping to ensure food security within the currently available technology. The study aimed to measure the level of efficiency of wheat production and to identify factors affecting efficiency in the study area. A multistage and purposive sampling technique was employed to select 366 wheat-growing smallholder farmers. Descriptive and inferential statistics, Tobit, and stochastic production functions were employed. The study was conducted using cross-sectional data collected in the 2021 production season selected at the Lemo district of the Hadiya zone. The stochastic production frontier model is used to estimate efficiency levels, whereas the Tobit model is used to identify factors affecting efficiency. The results it shows there was a significant level of inefficiency in Wheat production. The study result shows that 79.8%, 67.6%, and 53.4% are the mean levels of technical, allocative, and economic efficiency scores, respectively. The estimated stochastic production frontier model indicates that land, oxen, amounts of NPS and urea fertilizers, and amounts of seed are significant determinants of production level. The Tobit model results indicate that the education level of the household, participating in off-farm and non-farm activities, and livestock holdings have a significant positive impact on allocative and economic efficiencies. However, frequency of extension contacts, credit access, and row planting have a positive and significant effect on allocative efficiency. Education level of the households and livestock ownership have a positive and significant effect on cost efficiency. But the plot fertility affects technical efficiency positively and significantly. An increase in family size is statistically significantly and negatively affecting allocative efficiency. Therefore, policies and strategies of the government should be gathered towards the above-mentioned factors.

Keywords

Efficiency, Ethiopian agriculture, Lemo District, Stochastic Frontier, Wheat Production, Technical Efficiency, Allocative Efficiency, Economic Efficiency, Tobit Model.

Conclusion

This study examined the factors influencing the efficiency of smallholder wheat production in Lemo District using data from 366 farmers during the 2021 production year. A stochastic frontier model with inefficiency effects was employed to measure technical (TE), allocative (AE), and economic efficiency (EE) at the plot level. A Tobit regression model was used to identify socio-economic factors affecting these efficiencies.

The analysis revealed significant inefficiencies in wheat production, with average TE at 79.8%, AE at 67.6%, and EE at 53.4%. These results indicate that farmers could increase output by approximately 20.2% through better use of existing inputs and technology. Additionally, average farmers could reduce input costs by 33.4% through optimal input combinations, and total production costs by up to 46.6% if full economic efficiency were achieved. The study also found that inputs like land, seed, oxen-power, NPS, and urea significantly and positively impacted wheat output, while labor and chemical inputs were insignificant.

Efficiency levels varied widely among plots, suggesting a strong potential for improvement. The Tobit regression identified education level, family size, plot fertility, livestock holding, access to credit, extension contact frequency, off/non-farm income, and row planting as significant determinants of efficiency. These findings imply that targeted development policies and support programs focused on these factors could substantially enhance wheat production efficiency in the area. Based on these results, the study recommends that policy interventions address key socio-economic and agronomic variables to close efficiency gaps and improve productivity in smallholder wheat farming.

References

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