Technical, allocative, and economic efficiency among smallholder maize farmers in Southwestern Ethiopia: Parametric approach

Maize is one of the major five staple cereal crops in Ethiopia. High productivity and efficacy in its production is critical to improve food security, reduce the level of poverty and achieve or maintain agricultural growth. A multi-stage sampling technique was used to select 385 household heads and interviewed using a structured questionnaire during 2013/2014 production year. The study estimates, technical, allocative and economic efficiency using a parametric stochastic frontier production function (Cobb-Douglas). Inefficiency effects are modeled in a second stage applying a two-limit Tobit regression model. The results show that the mean technical, allocative and economic efficiency score was found to be 62.3, 57.1 and 39%, respectively, indicating a substantial level of inefficiency in maize production. The result depicted that important factors that affected technical, allocative and economic efficiency are a number of family size, level of education, extension service, cooperative membership, farm size, livestock holding and use of mobile. Based on the findings the following recommendations are forwarded. The government should motivate and mobilize the youth in agricultural activities, invest in the provision of basic education and facilitate the necessary materials, strengthen the existing agricultural extension system, organize non-member farmers in cooperative association and due attention should be given to enhance the efficiency of farmers with large land holding size. Further, government and stakeholders should promote the expansion of mobile networking in the study area.   Key words: Efficiencies, parametric stochastic approach, two-limit Tobit model, Ethiopia.