Smallholder Teff Productivity and Efficiency: Evidence from High-Potential Districts of Ethiopia

Smallholder agriculture focused policies predominated Ethiopia in the last two decades. Such policies are being questioned recently on grounds including research that show large-holders perform better in multi-factor productivity indices. We apply data envelopment analysis on recently collected data set to measure smallholder teff producers' relative productivity and efficiency. The results indicate that an average household is less than half as productive as optimal households and that there is therefore a considerable opportunity for output growth at current acreage. Analyses explaining differences in productivity indicate that productivity improves with, among others, schooling, specialising in few crops, access to credits, access to information on modern production methods directly through extension and indirectly through neighbourhood learning effects. While the data used is not inconsistent with the inverse farm size-yield relationship results of analyses indicate multi-factor productivity measures improve after a threshold of teff area.