Analysis of the technical efficiency of rice production in Fogera district of Ethiopia: a stochastic frontier approach

Abstract

The aim of this paper is to analyze the technical efficiency of rice production in Fogera District of Ethiopia. To do so, the stochastic frontier approach was employed on a data collected from 200 sample households in the 2015/16 production year. As a result, it was found out that except for manure, all variables in the Cobb-Douglass stochastic frontier model, which includes land, fertilizer, oxen, seed, and labor, were positively and significantly related to rice production. The average technical efficiency score predicted from the estimated Cobb-Douglas stochastic frontier production function was calculated to be 77.2 percent, implying that there was a room for rice yield increment by improving the resource use efficiency of households. The study also revealed that the provision of extension services, training on rice product improvement, experience on rice farming, agrochemicals, and education tend to be positively and significantly related to technical efficiency while household size was negatively and significantly related. Thus, strengthening the extension service provision and the training on rice yield increment, campaigns to disseminate rice farming experiences, and an increase in the supply of agrochemicals were crucial to improve the technical efficiency of rice production in the study area.

Keywords: Ethiopia, Fogera District, Technical Efficiency, Cobb-Douglas Production Function, Stochastic Frontier Approach

JEL classification: D24