Analysis of Technical Efficiency of Potato Production: The Case of Smallholder Farmers in Welmera Woreda

Abstract

In Ethiopia, increasing population pressure and low levels of agricultural productivity have contributed a lot to the food security problems by widening the gap between demand for and supply of food. Increasing productivity in crop production, which among others could be possible by enhancing the level of technical efficiency, is an important step towards enlightening food security. This study was aimed at estimating the levels of technical efficiencies of smallholder potato producer and to identify factors affecting efficiency performances of smallholder farmers in potato production in Welmera district, Oromia National Regional State, Ethiopia. A two stages sampling technique was used to select 150 sample farmers to collect primary data pertaining of 2019/20 production year. Both primary and secondary data sources were used for this study. Cobb-Douglas production function was fitted using stochastic production frontier approach to estimate technical efficiency levels, whereas a two-limit Tobit model was employed to identify factors affecting efficiency levels of the sampled farmers. The stochastic production frontier model indicated that input variables such as land, mineral fertilizers and seed were the significant inputs to increase the quantity of potato output. The estimated mean values of technical efficiency were 73.7%, which indicate the presence of inefficiency in potato production in the study area. A two-limit Tobit model result indicated that technical efficiency positively and significantly affected by age, education, farming experience, TLU, seeding/hoeing frequency, extension contact, frequency of agronomic practice training, access to cooperative, loan, access to work party/Debo, but negatively affected by land fragmentation. In general, the result indicated that there is a room to increase technical efficiency and thereby to increase productivity of potato producers in the study area.