The Determinants of Technical Efficiency of Farmers in Teff, Maize and Sorghum Production: empirical Evidence from Central Zone of Tigray Region

This study is made to examine the technical efficiency of farmers in Teff, Maize, and Sorghum production in the Central Zone of Tigray. The study used primary data collected from a sample of farm households selected using a combination of probability and non-probability sampling techniques in the 2014 cropping season. A single step stochastic frontier production model is used for Teff, Maize, and Sorghum production separately. Based on the regression output of the stochastic frontier models, there is no evidence of technical inefficiency of farmers in the production of Sorghum. Evidence of technical inefficiency is found in the production of Teff and Maize though the predicted level of inefficiency in Teff is infinitesimal (less than 1%). Therefore, the deviation of actual output from the frontier output in Teff and Sorghum production is the result of the stochastic factors beyond the control of the farmers such as bad weather, drought, and the like. The reason behind low level of output in Sorghum and Teff production is not technical inefficiency of farmers but the low level of the current technology available to the farmers. Therefore, increasing output in these two crops requires shifting the current level of technology. Only farmers in Maize production are found to be technically inefficient with a predicted possibility of 4.5% efficiency gains. The technical inefficiency of farmers in maize production significantly differs across the three Woredas; Werie-Lekhe with the highest inefficiency of about 11% followed by Lailai-Maichew and Kola-Temben with inefficiencies of 6% and 0% respectively. The low level of technical inefficiency in Maize, bare evidence of inefficiency in Teff and the nonexistence of inefficiency in Sorghum production are against the preceding evidences. This might be due to the difference in the choice of the dependent and explanatory variables. Moreover, the farmers might have improved their input use over the last couple of years due to training and extension services. Moreover, labor input measured in man days is found to be positive and significant in contrast to the preceding evidences implying agriculture in the study area not subjected to excess labor with zero or negative marginal productivity. Finally, suboptimal technology adoption [the use of fertilizers below or above the standard amount required] doesn’t affect output in Teff and Sorghum production but it tends to reduce output in Maize production. Moreover, training on modern input use, access for credit, the dummy for main crop, and irrigation are found to be significant determinants of technical efficiency in Maize production. Therefore, farmers should use the standard amount of fertilizer in Maize production and specialization is superior to diversification in all crops.