Abstract:
In Ethiopia, increasing population pressure and low levels of agricultural productivity have
aggravated the food insecurity situation by widening the gap between demand for and supply of
food. Increasing productivity and efficiency in crop production could be taken an important step
towards attaining food security. This study was aimed at estimating the levels of technical,
allocative and economic efficiencies of smallholder wheat producers; and to identify factors
affecting efficiency of smallholder farmers in wheat production in Abuna Gindeberet district,
Oromia National Regional State, Ethiopia. A two stages sampling technique was used to select
152 sample farmers to collect primary data pertaining of 2016/17 production year. Both primary
and secondary data sources were used for this study. Cobb-Douglas production function was
fitted using stochastic production frontier approach to estimate technical, allocative and
economic efficiencies levels, whereas two limit Tobit model was employed to identify factors
affecting efficiency levels of the sampled farmers. The stochastic production frontier model
indicated that input variables such as mineral fertilizers, land and seed were the significant
inputs to increase the quantity of wheat output. The estimated mean values of technical,
allocative and economic efficiencies were 78, 80 and 63% respectively, which indicate the
presence of inefficiency in wheat production in the study area. A two-limit Tobit model result
indicated that technical efficiency positively and significantly affected by sex of the household
head, education, extension contact, off/non-farm activity and soil fertility but negatively affected
by land fragmentation. Similarly, age, education, extension contacts and off/non-farm activity
positively and significantly affected allocative efficiency. In addition, economic efficiency
positively and significantly affected by sex, age, education, extension contact, off/non-farm
activity and soil fertility. The result indicated as there is a room to increase the efficiency of
wheat producers in the study area. The policy measures derived from the results include:
expansion of education, strengthening the existing extension services, establish and/or
strengthening the existing off/non-farm activities and strengthening soil conservation practices
in the study area
