Technical Efficiency of Wheat Producers in North Shewa Zone of Amhara Region, Central Ethiopia

The aim of this study is to analyze technical efficiency of wheat producers and identifying the sources of inefficiency in North Shewa Zone of Amhara National Region State, Central Ethiopia. A multi-stage sampling technique was used to select sample respondent households. In the first phase, three potential wheat grower districts namely, Bassona Worrana, Siyadebrna Wayu, and Moretna Jiru were selected purposively. In the second stage, six potential kebeles (lowest administrative level), two from each of the three districts were selected. In the third phase, proportionally with population size, 374 sample households were selected using simple random sampling techniques from each of the selected kebeles. Cobb-Douglas Stochastic Frontier Production (SFP) function and inefficiency function were used to estimate the technical inefficiency level of wheat producers using a one-step maximum likelihood estimation procedure. The average productivity of wheat was found to be 32.60 quintals per hectare. Land size, fertilizer, seed, labor, and oxen power were important factors of production positively and significantly affecting wheat output. Age and education level of a farmer, off-farm income, extension contact, and credit services were found negatively and significantly affecting the technical inefficiency of wheat producing farmers. The inefficiency components contributed about 70.62% of the total deviation from the best possible production output. The average technical efficiency (TE) level of wheat producers was 72%. Overall, the provision of fertilizers, credit, and extension services would make wheat producers more productive and technically efficient in the study area.