Crop Production Efficiency in Eastern Amhara, Ethiopia

Abstract Using sample data collected from 384 sample households in Eastern Amhara, North Shewa Zone, Ethiopia, and this study analyzes the technical, allocative and economic crop production efficiency of farmers as well as the key factors influencing it. A combination of descriptive and econometric methodologies were used to analyze the data. With the exception of oxen, all input variables (improved seed, cultivated land size, chemical fertilizer and labor days) had a positive and 1% significant effect on production, based on the maximum likelihood parameter estimates obtained from the stochastic frontier analysis. According to the analysis, crop-producing farmers' mean technical efficiency was 62.48%. This suggests that by operating at full technical efficiency, production in the study area can be raised by 35.2% at the current level of inputs and technology. Farmers in the research area had an average allocative efficiency of 86.47%, with ranging from 27.44–98.76%. This suggests that crop producer farmers can reduce their present input costs by 13.53% by using resources efficiently. The sample households' average economic efficiency was 54.11%, with the lowest and maximum efficiency ratings being 6.25% and 82.21%, respectively. The Tobit model's result indicated that technical efficiency was affected significantly by age of the head of the family, access to social networks, cultivated land area, irrigation involvement, agricultural experience, and alternative revenue sources. Additionally, the number of oxen, age of household head, access to social networks, agricultural experience, irrigation use, extension services, and other sources of income were significant variable impacting the economic efficiency of crop-producing farmers in the study area. The amount of the cultivated area and agricultural experience both have a major significant factors for allocative efficiency. According to the study's findings, smallholder farmers in Ethiopia's Eastern Amhara region may greatly increase the productivity of their crops by implementing new technology and better land management practices. This will improve their earnings and general standard of living, since farming is the community's primary source of livelihood. It is important that development organizations and governments back these initiatives aimed at raising the region's agricultural output.