Technical Efficiency and Determinants of Food Production in the Highlands of Ethiopia
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Date
1998-06
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A.A.U
Abstract
The main objective of this study is to identify major factors and constraints that determine crop
production and estimate the technical efficiency of smallholders in the highlands of Ethiopia.
Using cross-sectional data collected from 1660 households, this study has attempted to estimate
the stochastic frontier Cobb-Douglas production fiction, and it examines the determinants of
food production. Most of the coefficients of the variables included in the production function
(except that of credit and rainfall) are statistically significant and have the correct sign as
expected.
The result, suggests that the major determinants of food production in the Ethiopian highlands
are the traditional inputs, namely oxen, land and labor (family and hired). Furthermore,
education level and age of household heads that are expected to proxy management and
experience have exhibited positive and significant relationship with output.
The findings of the study have also indicated that there is a significant amount of technical
inefficiency among private farmers. The mean technical efficiency of the households covered in
this study is estimated to be 0.45. This implies that, it is possible to attain a maximum of 55%
increase in output by improving the efficiency of private farmers.
A comparison of technical efficiency of households, led by educated and uneducated, holders
have disclosed that the impact of education on the productivity of farmers is stronger at a higher
level of education than lower level.
Based on the findings of this study policy emphasis on education, extension service, land quality
improvement and increasing the availability of oxen etc. are recommended.
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Keywords
Food Production, Technical Efficiency