Technical Efficiency of Sorghum Production: The Case of Smallholder Farmers in Konso District, Southern Ethiopia

Abstract

This study aims to analyze the technical efficiency of sorghum production by smallholder farmers in Konso district, Southern Ethiopia using cross sectional data collected from a sample of 124 sorghum producing households. Individual levels of technical efficiency scores were estimated using the Cobb-Douglas functional form, which was specified to estimate the stochastic production frontier. The estimated stochastic production frontier model indicated that input variables such as land size, fertilizer (Urea and DAP), labour, oxen power and chemicals (herbicides or pesticides) found to be important factors in increasing the level of sorghum output in the study area. The result further revealed significant differences in technical efficiency among sorghum producers in the study area. The discrepancy ratio, which measures the relative deviation of output from the frontier level due to inefficiency, was about 90%. The estimated mean of technical efficiency of the sample households was about 69%, which shows existence of a possibility to increase the level of sorghum output by about 31% by efficient use of the existing resources. Among the household specific socio-economic and institutional factors hypothesized to affect the level of technical inefficiency, age, education level, family size, off/non-farm activities, extension contact, livestock holding, plots distance and soil fertility were found to be significant in determining the level of technical inefficiency of sorghum production in the study area. Negative coefficients of education level, family size, off/non-farm activities, extension contact and soil fertility indicates that improvement in these factors results in a significant decrease in the level of technical inefficiency. Akin, positive coefficients of age, livestock holding and plots distance were found to increase households’ technical inefficiency. Hence, emphasis should be given to improve the efficiency level of those less efficient households by adopting the practices of relatively efficient households in the study area. Beside this, policies and strategies of the government should be directed towards the above mentioned determinants.