Determinants of productivity and efficiency of teff production in southwest Ethiopia: Parametric approach

Abstract Agriculture in Ethiopia is characterized by low productivity for most crops including teff which is gaining prominence as both a food and income crop. The low productivity is mostly attributed to inefficiencies. To solve this, improving efficiency of the farmer has received the greatest attention as it is more cost effective than introducing new technologies. This study was undertaken in southwest Ethiopia to assess productivity and technical, allocative and economic efficiencies of teff farmers and identifies factors that determine productivity and inefficiencies. Cross sectional data from a random sample of 323 teff producing farmers collected during 2018/19 production season were used for the analysis. A Cobb-Douglas production function was employed to assess teff productivity and factors conditioning productivity. In addition, stochastic production frontier model was used to estimate technical, allocative and economic efficiency level where as OLS regression was used to identify factors affecting inefficiencies level. The result depicted that productivity of teff was significantly influenced by the use of seed, fertilizer, and labor. The estimated mean values of technical, allocative and economic efficiencies were 69, 60 and 56% respectively, which indicate the presence of inefficiency in teff production in the study area. The OLS model results revealed that education levels, age, soil fertility and frequency of extension contact had a significant negative effect on technical inefficiency. Similarly, education levels, participation in off/non-farm activities, soil fertility and frequency of extension were found to have negative effect on allocative inefficiency while education levels, participation in off/non-farm activities and soil fertility had negative influence on economic inefficiency. Hence, policies and strategies of the government should be directed towards the above mentioned determinants.