Vol. 5 No. 2 (2023): Economic efficiency in maize (Zea mays L.) production of small holder farmers in Amhara Regional State, Ethiopia

Abstract

Ethiopian agriculture is explained by low productivity, caused by a combination of demographic economic, constraints, and other factors such as-policy factors, drought, war, lack of basic infrastructure, etc. To improve this problem many of the researchers are focusing only on technical efficiency. So, technical and allocative efficiency are important in improving the productivity gains from existing technology. A multi-stage sampling technique was employed. The study was conducted using cross-sectional data. From 366 households randomly selected. The stochastic frontier function was used to estimate the level of technical efficiency (TE), allocative efficiency (AE), and economic efficiency (EE), whereas the Tobit model was used to identify factors affecting efficiency level. The mean TE, AE, and EE were 90.3%, 59.9%, and 76.4%, respectively. The Tobit model results revealed that Gender distance to market, access to credit, training, extension service, seed Variety, and group membership had a significant positive effect on TE, while household size and education level had a negative significant effect on TE. Age, gender, group membership, training, extension service, and seed variety had a positive significant effect on AE, however, household size had a negative significant effect on AE. Moreover, age, gender, group membership, training, extension service, and seed variety had a positive significant effect on EE. However, household size, experience, and distance to market had a negative significant effect on EE. The results showed that there is an opportunity to increase the efficiency of maize production in the study area through improving seed. Therefore, the policies and strategies in development and research may act on these variables to increase the efficiency level of maize producer farmers.