Economic Efficiency and Its Determinants of Smallholder Sorghum Producers

The Case of Hidabu Abote District, Ethiopia

Abstract

In Ethiopia, increasing productivity and efficiency in crop production could be taken as an important step towards attaining food security. This study was aimed to measure economic efficiency and its determinants of smallholder sorghum producers in Hidabu Abote District, Ethiopia. Two stage sampling technique was used to select 153 sample farmers to collect primary data for 2020/21 production year. Cobb-Douglas stochastic frontier and a two- limit Tobit model were used for data analysis. The result of the stochastic frontier model revealed a statistically significant positive elasticity of labour and oxen power. The estimated mean values of technical, allocative, and economic efficiency were 65.2%, 79.8%, and 51.9%, respectively. On average, there was a yield gap of 8.58 quintals/hectare due to inefficiency. A two-limit Tobit model indicates that education, soil fertility, frequency of extension contacts, sex, farm experience, and livestock ownership contributed significantly and positively to efficiency, while striga weeds and distance from home to farmland had a significant and negative effect on efficiency. Therefore, due attention should be paved to improve soil fertility, livestock rearing, supply, striga resistance varieties, increasing the frequency of extension contact, and expanding of roads to improve the efficiency of sorghum farmers.