Analysis Of Economic Efficiency Of Maize Production By Smallholder Farming Households In Hababo Guduru Woreda, Horo Guduru Wollega Zone, Oromia Region, Ethiopia

Abstract

Ethiopian agriculture is characterized by low production. Either the use of contemporary technology or increasing farmers' productivity is crucial for solving this issue. The most focus has been placed on increasing farmer efficiency because it is more economical than adopting new technologies. Analyses of smallholder farmers’ levels of technical, allocative, and economic efficiency as well as factors influencing those levels in the research area’s maize production were the main objectives of this study. In order to achieve the given goals, primary data were gathered from 144 randomly chosen sample households throughout the production year 2021/22 using structured questionnaires. Tobit model was utilized to determine factors affecting efficiency level, while stochastic production frontier model was used to estimate technical, allocative, and economic efficiency level. Technical, allocative, and economic efficiency were, respectively, 73.99%, 71.16%, and 50.13 percent on average. Thus, the findings show that the production of maize in the study area suffers from significant levels of inefficiency. The Tobit model results showed that technical efficiency was significantly positively influenced by education levels, family size, and farm size, frequency of extension contact, credit usage, and off-farm activities. It was discovered that having livestock, engaging in off-farm activities, and the distance between the maize field and the dwelling had good effects