Abstract:
Ethiopia is emerging as an important rice growing country in Eastern Africa. However,
its performance is unsatisfactory and production stood at behind the population growth.
Improving productivity through introduction of modern technologies and/or improving
the efficiency of inputs will be an important alternative to fill the gap between demand
and supply. Thus, the aim of this study was to measure the level of technical, allocative
and economic efficiencies and to identify factors affecting these efficiencies in Gurafera
woreda. Two-stage random sampling technique was used to select 148 household heads
and interviewed using a structured questionnaire during 2017/18 production year.
Descriptive statistics, stochastic frontier and two-limit Tobit regression models were
employed. STATA version 13.0 software was used to analysis the levels of technical,
allocative and economic efficiencies. As a result, the mean technical and allocative
efficiencies were 78.5 and 80.56%, respectively. While the mean economic efficiency was
63.18%. The average technical and allocative efficiencies implies that there exists a
possibility to increase rice production by 21.5% without using extra inputs and decrease
cost of inputs by 19.44%, respectively. The Cobb-Douglas production function result
indicated that, rice output was positively and significantly influenced by land, labor.
Seed, oxen, herbicide and DAP. Likewise, a two-limit Tobit model revealed that economic
efficiency was positively and significantly affected by education, frequency of extension
contact and cooperatives membership and variables like, proximity to market and nonfarm income affected it negatively. The results showed that there is an opportunity to
increase the efficiency of rice production in the study area. Finally, policies target to
motivate and invest in the provision of basic education, strengthen the existing
agricultural extension system, organize non-member farmers in cooperative association
and development of market and road infrastructures needs to improve economic
efficiency of smallholder rice producers
