Technical Efficiency of Groundnut Production: The Case of North Western Ethiopia

Abstract

This study was aimed to measure the technical efficiency of farmers and to investigate determinants of technical inefficiency of groundnut producers in the north western parts of Ethiopia. A Semi-structured questionnaire was used to collect the primary data from 201 randomly selected groundnut producers in the North western parts of Ethiopia. Descriptive statistics and stochastic frontier production model was employed. The result showed that the average technical efficiency of groundnut production was 0.68. This indicates, given the available existing technology, groundnut production can be increased by 32%. The SFP model revealed that area and labor were found to be statistically and positively significant at 1 and 5% significance levels respectively. The positive result suggests; a 1% increase can have a potential increase in the yield of groundnut. The maximum likelihood estimates of the SFP model showed that Age, livestock ownership, marital status and training of the household head was found to be negatively influenced the technical inefficiency; whereas, sex of the household head and proximity to the nearest market were positively influenced technical inefficiency of groundnut producers. Therefore, this study suggests that improving livestock ownership and productivity, integrating women with agricultural extension service and programs, and arranging farmers experience sharing will enhance the technical efficiency of the farmers.