TECHNICAL EFFICIENCY OF SMALLHOLDER COFFEE PRODUCER IN MANA WEREDA JIMMA ZONE

Abstract

Coffee production in Ethiopia is a longstanding tradition that dates back dozens of centuries.Ethiopia is where the coffee Arabica plant originates.The Central Statistical Agency (CSA) reported that 26,743 tons of coffee were produced in JimmaZone,based on inspection records from the Ethiopian Coffee and Tea authority. This represents 23.2% of the Region’s output and 11.8% of Ethiopia’s total output. Even though coffee is the mainstay of the Ethiopian economy and several millions of people in the country, as well as familiar in the study area since the time of its discovery, its full productive capacity has not been exploited yet. Furthermore, researchers conducted on the Economic efficiency analysis of smallholder coffee producers also scarce in the study area. Accordingly, this study wasconducted to estimate the economic efficiency analysis of the coffee production of smallholder coffee farming 372 sampled farmer in the Jimma zone, based on the primary data by random sampling coffee farmers using cross-Sectional method through interview questioners. The data was analyzed using descriptive as well as econometric regression analysis. In econometric analysis Education and family size affects the technical inefficiency of coffee production significantly and positively at 5% and 1% level of significance. Also not to use chemical illustrates that it is significant (at 5 % probability level) and had a positive relationship with the probability of improving farmers income. The cobb-goudas’ production model result shows the locative efficiency affected by log of farm area and log of labor participated in farming of household proxies by family size is about 30 percent of total production. The results of production efficiency was used the parametric stochastic production frontier (SPF), model and the result shows the inefficiencies in the production technique is about 10 percent of the unexplained part.Socioeconomic factors that affect the technical efficiency of smallholder coffee farming was SEX of house hold head. Age, education level, access to financial credit, land fertility, distance from farm land, distance to primary market area. All variables are significant at below 5 percent level of significance except level of education.The study recommends that all factor that affect both allocative and technical efficiency variables need attention in case improvement will be evitable. Further investigation on unexplained part recommended to be studied.