Technical Efficiency of Smallholder Farmers Wheat Production: The Case of Debra Libanos District, Oromia National Regional State, Ethiopia

This study aimed to examine the technical efficiency of smallholder farmers in wheat production in the Debra Libanos district. Two stages sampling technique was used to select 150 sample farmers to collect primary data using crosssectional data of 2018/19 production season. Data analysis was carried out using descriptive statistics like mean, minimum, maximum, frequency and standard deviation and econometric models such as stochastic production frontier and two-limit Tobit regression models to estimate level and identify factors affecting technical efficiency respectively. The estimated stochastic production frontier model indicated that land, labor, seed and chemical fertilizer were positively and significantly affects farmers’ wheat production level. The study indicated that the average technical efficiency level of wheat producing farmers was 78.5% implying that there was technical efficiency variation among smallholder farmers in the study area. In other words, the average wheat yield loss due to technical efficiency variation was 5.13 qt per ha. Therefore, these results implied that there is a room to increase the efficiency of wheat production in study area. Moreover, the two-limit Tobit regression model results showed that age, family size, livestock size, frequency of extension contact and frequency of ploughing had positive and significant effect on technical efficiency. Hence, attention should be given to improve the efficiency level of those less efficient farmers by adopting the practices of relatively efficient farmers in the study area. Besides this, policies and strategies of the government should be directed towards the above mentioned determinants.