Smallholders technical efficiency of teff production in Ethiopia

Abstract

The main objective of this study is to examine the level and determinants of technical efficiency of smallholder Teff producers in Ethiopia using Stochastic Frontier Analysis (SFA), with appropriate production function, trans-log by LR test. Secondary data from Ethiopian socio-economic survey were used for the analysis. The result of Maximum likelihood Estimate (MLE) shows that area, fertilizer and fragmentation of land are major factors that influence productivity, and output elasticity has positive response on area, labour and fertilizer inputs. The average estimated technical efficiency of small holder farmers ranges from 0.13 to 0.92%, with mean efficiency of 73%. This implies that Teff productivity can be increased by 27% at existing level of technology. The result also shows there is inefficiency in production of Teff since discrepancy ratio gamma, γ is high and about 0.85. The study also identified that agro-ecology zones, age, extension, seed type, other income are the major socio economic factors influencing efficiency. Finally, the study recommends that policy geared towards the enhancement of productive efficiency of smallholder, through the appropriate consideration of inputs, socio economic factors and other facilities are important to address problem of food insecurity in Ethiopia. Key words: Teff, technical efficiency, stochastic frontier, agro-ecological zone, maximum likelihood estimate, Ethiopia.