Production efficiency of wheat farmers in the Arsi Zone, Oromia Region of Ethiopia

Abstract Wheat is a cereal crop that contributes to food security; thus, Ethiopia must boost the production efficiency of wheat to meet the sustainable development goal of eradicating hunger and poverty. Consequently, a significant revolution is occurring in the Ethiopian wheat industry to improve production and productivity. Therefore, it is critical to understand the current level of wheat farmers’ efficiency, as its production is highly influenced by existing agricultural technologies and climate change, which makes it dynamic. Accordingly, this study employed the parametric Cobb–Douglas stochastic frontier and two-limit Tobit models to evaluate wheat farmers’ efficiency and determine their drivers in Ethiopia’s largest wheat-producing area, the Arsi Zone. A multistage sampling strategy was applied to obtain a representative sample of 422 wheat farmers. The model’s output suggested that the average technical, allocative, and economic efficiency scores were 80.8%, 88.1%, and 71.3%, respectively. It is confirmed that wheat farmers’ efficiencies can increase with household head age, education level, livestock ownership, contact with extension agents, wheat mechanization, and involvement in non/off-farm activities but decrease with household distance from the main market and total land holdings. To realize the potential gains from wheat cultivation in Ethiopia, the government needs to develop policies and strategies that enhance farmers’ education, livestock production, and extension contact, facilitate infrastructure, market development, and wheat mechanization, and promote non/off-farm activities.