Resource use efficiency of smallholder maize producers’ in Bilo Nopa District, Ilu Ababor Zone, Oromia Region, Ethiopia: An application of stochastic frontier analysis

Abstract

Increasing productivity and efficiency in crop production could be taken as a topic of investigation towards attaining food security. This study was aimed at estimating the levels of technical efficiency of smallholder maize producers; and to identify factors affecting it in Bilo Nopa district using cross-sectional data collected from 152 smallholder maize producing farmers using structured questionnaires. Both primary and secondary data sources were used. The Stochastic Frontier Analysis approach was used to estimate the level of technical efficiency, whereas the Tobit model was used to identify factors affecting technical efficiency levels of the sample farmers. The Stochastic Frontier Analysis model indicated that input variables such as seed, land, number of oxen, and labor were the significant inputs to increase the quantity of maize output in the study area. The discrepancy ratio (γ) implied that about 85% of the variation in maize production was attributed to technical inefficiency effects. The mean technical efficiency of maize producers was 72.5%. This implies that output can be increased by 27.5% given the existing level of technology and resources. A Tobit model results indicated that education, family size, soil fertility, frequency of extension
contact and credit utilization were positively and significantly determine the technical efficiency of farmers. The study result indicated that there is a room to increase the efficiency of maize producers in the district. Hence, emphasis should be given to improve the technical efficiency level of those less efficient farmers through expansion of education facilities, improving soil fertility, strengthening the extension services, and facilitating credit services in the study area.