Economic Efficiency of Crop Production in Gurage Zone: The Case of Abeshige Woreda, Snnpr Ethiopia

Abstract

Efficiency is an accomplishment through operation to use least amounts of inputs to achieving a highest level of output it is an important area of study because ensuring efficiency minimizes the wastage of resources while accomplishing the desired outputs. This study was to decide the economic efficiency of crop producing rural farmers in abeshigeworeda or district which is one of the districts in gurage zone, SNNPR. Six kebeles and 399 sample respondents were selected through applying stratify sampling procedure. The descriptive statics, Parametric Stochastic Frontier Production Function, the Cobb Douglas production function and Tobit regression methods were used to accomplish the objective of the study. The rural farmers ranked constraints were analyzed through using Kendall’s coefficient of concordance to test for the degree of agreement in ranking. Technical efficiency estimates range from 19.94 percent to 95.16 percent with a mean efficiency of 64.69 percent, while Allocative efficiency estimates range from 15.52 percent to 97.69 percent with a mean of 57.47 percent. The economic efficiency estimates range from 10.9 percent to 81.29 percent with a mean of percent. As the result indicated, crop output was positively and significantly influenced by labor, seed, fertilizer, house hold size and land size. This study therefore recommended that would improve the application of full packages of fertilizer and improved seed, appropriate use of productive labors, line method of seeding and membership of individual farmers.