Abstract:
Agriculture in Ethiopia is characterized with low productivity. To improve this problem either
introduction of modern technologies or improving the efficiency of farmers is an important.
Improving efficiency of the farmer has received the greatest attention as it is more cost
effective than introducing new technologies. The aim of this study was to analyze levels of
technical, allocative and economic efficiency of smallholder farmers and factor affecting
efficiency levels of farmers in maize production in the study area. To meet the stated
objectives primary data were collected using structured questionnaires from 154 randomly
selected sample households during the 2017/18 production year. Stochastic production
frontier model was used to estimate technical, allocative and economic efficiency level where
as Tobit model was used to identify factors affecting efficiency level. The mean technical,
allocative, economic efficiency were 71.65%, 70.06% and 49.89%, respectively. Thus the
results reveal exists considerable levels of inefficiencies in maize production in study area.
The Tobit model results revealed that education levels, family size, farm size, frequency of
extension contact, uses of credit and participation in off/non-farm activities had a significant
positive effect on technical efficiency. Livestock holding and participation in off/non-farm
activities had positive effect and distance of maize plot from home were found to had negative
effect on allocative efficiency while education levels, family size, uses of credit, extension
contact and participation in off/non-farm activities were found to had positive effect and
distance of maize plot from home is negative influence on economic efficiency. The result
indicated that there exists a room to increase the efficiency of maize producers in the study
area. For realizing significant economic efficiency gains policies and strategies of the
government should be directed towards increasing farmer’s education and livestock holding,
promoting off/non-farm activities, facilitating credit and extension service
