Analysis of Technical and Allocative Efficiency among Small Scale Maize Producers in Arsi Negele Woreda, West Arsi Zone of Oromia, Ethiopia

Abstract

This research study is carried out to examine Technical and allocative efficiency among Maize growers in Aesi Negele Woreda, West Arsi Zone of Oromia, Ethiopia. The study is based on primary and secondary data, collected through a well designed questionnaire from a sample of 98 small holder Maize producers. The data were analyzed with the use of stochastic frontier Cobb. Douglas production function to estimate the efficiency level and identify important factors affecting the efficiency. Moreover, the allocative efficiency was estimated using APP, MPP and MVP. The maximum likelihood estimates for the model indicate that land, seed quantity and labor have positive significant effects on maize yield. However, the amount of fertilizer applied had a negative relation with maize output. Allocative efficiency analysis reveals that land, labour and seed are underutilized, while fertilizer over utilized for maize production in the study area. Finally, the study recommends training for maize growers and provision of advanced new technological options has a vital role in boosting production and productivity efficiently.