Agricultural Technological Change and Technical Efficiency of Crop Production in Ethiopia

Abstract

Proper utilization of agricultural technology and enhancing the technical efficiency
of crop production are key factors for agricultural output growth in Ethiopia.
However, the lack of studies that assess the broad set of agricultural technological
change and efficiency of multiple crop production together using longitudinal
datasets poses major challenges in identifying crop production impediments in
Ethiopia. This study explores agricultural technological changes (specifically
fertilizer, improved seed, pesticides, irrigation, and extension services) and the
factors contributing to technical inefficiency in crop production in Ethiopia.
National-level representative longitudinal data sets from 2004/05 to 2018/19 were
obtained from the Central Statistics Authority and the Ethiopian Meteorology
Agency-(EMA) as data sources in Ethiopia. A panel stochastic frontier model using
a true fixed-effect econometrics model was applied to estimate the coefficients of the
elasticity production coefficients, identify technical inefficiency factors, and
estimate the level of technical efficiency scores for multiple aggregate crops at the
national and regional levels. This study assessed the trends in agricultural
technology use from 2004/05 to 2018/19 in Ethiopia. In response to the increased
utilization of land, labor and inputs such as chemical fertilizer, pesticides, improved
seeds and improved practices through expanded extension coverage, the use of
irrigation, and the availability of rainfall and temperature, good progress in
agricultural production and productivity was observed from 2004/05 to 2018/19.
However, there is a less adequate supply of agricultural production input technologies and the intensive utilization of irrigation is highly insufficient. Furthermore, the elasticity coefficient estimates with respect to labor, cultivated
area, chemical fertilizer, and pesticide have positive and significant effects on crop
output, indicating the importance of these inputs. However, the use of capital and
local seed had negative and statistically significant impacts on crop output from
2004/05 to 2018/19 in different regions of Ethiopia. The overall technical efficiency
value of 73.84% at the national level shows room for further increasing yield using
existing technologies by working on inefficiency factors. Additionally, the room for
further boosting yield is wide and differs across major regions in Ethiopia. The
future crop output growth will be driven by a combination of enhancing the use of
agriculture technologies and efficiency of crop production through promoting the
use of suitable, reliable and affordable modern agriculture technologies, revitalized
agricultural advisory services, mechanization services, providing targeted
affordable credit services, land consolidation by cluster farming, deployment of a
labor force, and the intensive use of irrigation systems over the coming years.