Analysis of Technical Efficiency of Smallholder Irrigated Cotton Producers in Middle Awash Valley, Northeastern Ethiopia

Abstract

This study estimated the level of technical efficiency and its determinants of smallholder irrigated cotton farmers in the Middle Awash Valley of Northeastern Ethiopia. A multi-stage purposive random sampling procedure was employed to select 74 irrigated cotton farmers from Amibara district of Afar region. A structured questionnaire and field observations were employed to collect relevant information. Data were analyzed using stochastic production frontier approach. Results showed a mean technical efficiency level of irrigated cotton farmers to be 71%; indicating that there was 29% possibility of increasing cotton production in the valley given the current state of technology and inputs level. The results indicated that elasticities of the mean output for the cotton area, labor cost, and irrigation frequency were positive while those of seed and pesticide costs were negative. Further, the empirical results from the inefficiency effects model revealed that experience in cotton farming, extension service, credit access, tenancy status, salinity level, and distance to the main irrigation water canal were found to be important in explaining farmers' technical inefficiency in the study area. The study recommends that government efforts are vital in increasing cotton output through improvement in technical efficiency by ensuring timely delivery of optimal quantities of inputs, such as cotton seed and chemicals. Provision of short-term credit service and promotion of research findings through extension services would also be crucial.