American Journal of Rural Development
ISSN (Print): 2333-4762 ISSN (Online): 2333-4770 Website: http://www.sciepub.com/journal/ajrd Editor-in-chief: Chi-Ming Lai
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American Journal of Rural Development. 2018, 6(2), 49-58
DOI: 10.12691/ajrd-6-2-4
Open AccessArticle

Farm Level Efficiency of Crop Production in the Central Highlands of Ethiopia

Beneberu Teferra1, 2, , Belaineh Legesse2, Jema Haji2 and Girma T. Kassie3

1Debre Birhan Agricultural Research Center, Debre Birhan, Ethiopia

2School of Agricultural Economics and Agribusiness, Haramaya University, Ethiopia

3ICARDA (International Center for Agricultural Research in the Dry Areas), Addis Ababa, Ethiopia

Pub. Date: September 02, 2018

Cite this paper:
Beneberu Teferra, Belaineh Legesse, Jema Haji and Girma T. Kassie. Farm Level Efficiency of Crop Production in the Central Highlands of Ethiopia. American Journal of Rural Development. 2018; 6(2):49-58. doi: 10.12691/ajrd-6-2-4

Abstract

The gap between demand for and supply of food can be minimized by improving productivity either through introduction of modern technologies, reallocation of resources or improving the efficiency of production. It is however almost impossible to increase production by bringing more land and capital resources as they are very limiting in the rural parts of the developing world. Wheat, faba bean (horse bean) and lentil are the three most important crops in the central highlands of Ethiopia and enhancing the farm level efficiency of their production is a crucial component of the food security strategy of the government. This study aims at analyzing level and determinants of production efficiency of these crops by smallholder farmers in North Shewa zone. The study generated data from 480 randomly selected smallholder farmers in the 2015/16 production season. The study estimated, technical, allocative and economic efficiencies using Data Envelopment Analysis technique. The results showed that mean technical, allocative and economic efficiencies were 77%, 69% and 53%, respectively, indicating a substantial inefficiency in the production of these important crops. Analysis of determinants of efficiency using a double-bounded Tobit model indicates that age, education, off/non-farm income, livestock holding, credit access, extension contacts, market distance, distance to all weather road and average farm plots distance significantly affect efficiency of production. The findings of the study show that the production efficiency of these crops can be significantly improved through increased integration of the crop and livestock subsystems, investment of basic education and infrastructure, and improvement of the agricultural extension system and the rural credit services.

Keywords:
allocative efficiency economic efficiency technical efficiency data envelopment analysis

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