Yield Gaps and Technical Inefficiency Factors for Major Cereal Crops in Ethiopia: Panel Stochastic Frontier Approach

Abstract

Enhancing the productivity of major cereal crops by narrowing the yield gap between achieved and potential is intrinsically linked with the improvement of the technical inefficiency of crop production. The study aims to explore yield gaps and technical inefficiency factors for major cereals (maize, wheat, tef, sorghum, and barley) using longitudinal data sets from 2007/2008 to 2020/2021 and agricultural field survey data sets from the Central Statistics Authority and other official data sources in Ethiopia. A panel stochastic frontier approach using a true fixed-effect model was applied to estimate the elasticity coefficients of production, determinants of technical inefficiency, and their scores. The result shows productivity of the major cereals steadily increasing over the last fifteen years, with a higher rate of increase from 2013/2014 onwards, particularly for maize. However, the yield increase recorded for all major crops in 2020/2021 was below average compared to achievable yield levels recorded. The elasticity coefficients estimates with respect to cultivated area, area covered with local seed, labor, chemical fertilizer, and pesticide spray had a positive and significant effect on the crop outputs, indicating the importance of these inputs to enhancing production and productivity. However, capital and local seed had significant negative effects on sorghum and maize outputs; while use of chemical fertilizer for maize output only. The level of technical efficiency (TE) of farming improved with an increase in irrigated areas, extension service cover, amount of rainfall, and in some agroecologies. However, TE declined in moisture-sufficient agroecology for wheat and barley. Further, a mean TE score of 82.66% for maize, 85.04% for sorghum, 60.77% for wheat, 52.65% for barley, and 88.62% for teff output indicates the existence of various levels of inefficiencies. The study recommends narrowing productivity gaps for the major cereals through improving the supply and utilization of agricultural inputs, expanding irrigation, improving access to better technology; strengthening the extension system; and strengthening the agriculture-supporting research system.