Technical Efficiency of Wheat Production by Smallholder Farmers in Soro District of Hadiya Zone, Southern Ethiopia

Abstract

Productivity of what in Ethiopia is below potential. This could be attributed to a number of factors among
which is lack of knowledge on how to use new wheat crop production technologies. Therefore, this study was
conducted to estimate the technical efficiency of smallholder wheat producers and identify its determinants in Soro
district of Hadiya zone, southern Ethiopia. Cross sectional data from a random sample of 125 wheat producing
farmers were collected during the 2015/16 main production season and analyzed. A Cobb-Douglas Production
Function and Stochastic Frontier Analysis were employed to achieve the objectives. The results revealed that the mean
technical efficiency of wheat producing farmers was 72%. The discrepancy ratio gamma (γ), which measures the
relative deviation of output from the frontier level due to inefficiency, was about 63%. This implies that about 63% of
the variation in wheat production among the sample farmers was attributed to technical inefficiency effect. The
estimated inefficiency parameters showed that age, education level, land ownership, fertility status of the plots and
extension contact negatively and significantly affected technical inefficiency of wheat production showing that an
increase in the value of the variable attached to the coefficient means the variable negatively contributed to
inefficiency level or conversely it contributed positively to efficiency levels. However, land fragmentation positively
and significantly affected technical inefficiency showing that this variable has a negative influence on technical
efficiency.