This study aimed to analyze the technical efficiency of sesame production in Humera area and to identify major factors that cause efficiency differentials of smallholder farmers. The objective of the study is to measure the technical efficiency of small holder farmers in sesame production.
The study was conducted using a cross sectional data collected in 2015/2016-production year from a total sample of 110 households. Cobb-Douglas function was employed to estimate technical efficiency of smallholder farmers in sesame production. The finding of the study indicated that there is inefficiency in the production of sesame in the study area. The estimation of the frontier model with inefficiency variables shows that the mean technical efficiency of farmers is 0.69 (69%). This implies that production of sesame can be increased by 31 percent given the existing technological level. This indicates that the farmers did not using production inputs efficiently in such a way that they give their maximum potential.
The estimated stochastic production frontier model together with the inefficiency parameters suggests that any attempt to strengthen technical efficiency of smallholder farmers in the study area must give due attention to the improvement of the principal causes for efficiency differentials such as education, age, extension contact, credit availability, off farm activities and proximity, which were found to be significant determinants of efficiency level. The negative coefficient of educational status, age, credit availability, extension contact and off farm activities means these factors are important in determining the existing efficiency of farmers positively and significantly. While the positive coefficients of proximity indicate that the increments in these factors increase inefficiency. Given the limited resources in the study area will enable the concerned parties engaged in efforts for improvement of the product and productivity of this part of the community to bring about the desired changes in a cost effective way than trying to inject an investment on the production of sesame.
Table of Contents
1. INTRODUCTION
1.1. Background of the study
1.2. Statement of the Problem
1.3. Objectives of the Study
1.3.1. General Objective
1.3.2. Specific Objective
1.4. Hypothesis of the Study
1.5. Significance of the Study
1.6. Scope and Limitation of the Study
1.7. Organization of the thesis
2. LITERATURE REVIEW
2.1. Theoretical Concept
2.1.1. Concepts of Technical Efficiency
2.1.2. Measurement Issues of Technical Efficiency
2.2. Empirical Evidence
2.2.1. World Sesame Production
2.2.2. Sesame Production in Ethiopia
2.2.3. Major Sesame Seed Producing Zones
2.2.4. Empirical Findings Outside Ethiopia
2.2.5. Empirical Finding on Ethiopian Farms
2.3. Conceptual Framework
3. RESEARCH METHODOLOGY
3.1. Description of the Study Area
3.2. Sampling Technique
3.3. Sources and Method of Data Collection
3.4. Methods of Data Analysis
3.4.1 Efficiency Estimation
3.5. Variables as measured in the Model
4. RESULTS AND DISCUSSION
4.1. Descriptive Results
4.1.1. Demographic Characteristics
4.1.2. Input Basis of the Farmers
4.1.3. Production Practices
4.1.4. Institutional Support
4.1.5. Major Production Constraints
4.2. Econometric Analysis Results
4.2.1. Maximum Likelihood Estimates of Parameters of the Models
4.2.2. Technical Efficiency Scores
4.2.3. Actual - potential level of sesame output
4.2.4. Technical Inefficiency
5. CONCLUSIONS AND RECOMMONDATIONS
5.1. Conclusions
5.2. Recommendation
5.3. Suggestions for Future Research
Research Objectives and Focus
The primary objective of this study is to analyze the technical efficiency of smallholder farmers in sesame production within the Humera area, Ethiopia, and to identify the key socio-economic and institutional factors that contribute to efficiency differentials among them.
- Measurement of technical efficiency levels of smallholder sesame producers.
- Identification of determinants causing variation in efficiency levels.
- Estimation of potential output growth through improved input utilization.
- Formulation of evidence-based policy recommendations to boost agricultural productivity.
Excerpt from the Book
2.1.1. Concepts of Technical Efficiency
In production theory the main choices center on what to produce (i.e., which product or combination of products), how much to produce (the levels of output) and how to produce (the combination of inputs to use). The decision making unit is the firm which is defined as a “distinct agent specialized in the conversion of inputs into desired goods as outputs”. (Farrell, 1957). Technical efficiency may be defined as the ability of a firm to produce as much output as possible with a specified level of inputs, given the existing technology. Technical efficiency concerns the way in which physical quantities of input are converted into physical quantities of output. Farmers are said to be technically efficient if they achieve maximum feasible output from inputs.
According to the neoclassical definition of technical efficiency, a production process is technically efficient if and only if it yields the maximum possible output for a specified technology and input set. The concept of efficiency can be explained more easily using input or output oriented approaches. Farrell (1957) used an input-oriented approach to illustrate the measurement of efficiency. He used a simple example involving firms, which use two inputs, x1 and x2, to produce a single output y, under the assumption of constant returns to scale.
The constant returns to scale assumption allows to represent the technology using a unit iso-quant. Farrell discussed the extension of his method so as to accommodate more than two inputs. Knowledge of the unit iso-quant of the fully efficient firm, represented by TT' in figure 1, permits the measurement of technical efficiency. If a given firm uses quantities of inputs, defined by the point k, to produce a unit of output, the technical inefficiency of that firm could be represented by the distance yk, which is the amount by which all inputs could be proportionally reduced without a reduction in output. This is usually expressed in percentage by which all inputs could be reduced.
Summary of Chapters
1. INTRODUCTION: This chapter outlines the role of agriculture in the Ethiopian economy and establishes the problem statement regarding low productivity in sesame production in the Humera area.
2. LITERATURE REVIEW: This chapter provides a theoretical foundation on technical efficiency and reviews empirical evidence from various agricultural studies, both within and outside Ethiopia.
3. RESEARCH METHODOLOGY: This section details the research design, including the study area description, sampling techniques, data collection methods, and the stochastic frontier model used for analysis.
4. RESULTS AND DISCUSSION: This chapter presents the descriptive statistics of the survey and the econometric results from the stochastic frontier analysis, discussing the determinants of technical efficiency.
5. CONCLUSIONS AND RECOMMONDATIONS: This final chapter synthesizes the findings and provides policy recommendations to improve the productivity and efficiency of smallholder farmers.
Keywords
Sesame, Technical Efficiency, Smallholder farmers, Stochastic production function, Agricultural Economics, Ethiopia, Humera, Input-oriented, Output-oriented, Production Frontier, Efficiency differentials, Rural Development.
Frequently Asked Questions
What is the primary focus of this research?
The research focuses on assessing the technical efficiency of smallholder farmers specifically engaged in sesame production in the Humera area of Ethiopia.
What are the main thematic areas covered?
The study covers production theory, measurement of technical efficiency using stochastic frontier models, empirical analysis of agricultural production, and the impact of socio-economic and institutional factors.
What is the central research question?
The central question is: How technically efficient are smallholder farmers in the Humera region, and which factors are responsible for the efficiency differentials observed among them?
Which scientific methodology is employed?
The study employs a stochastic frontier production function (Cobb-Douglas specification) to estimate technical efficiency levels and identify determinants of inefficiency.
What is addressed in the main body of the work?
The main body examines the theoretical concepts of efficiency, presents the research methodology, provides descriptive results regarding demographics and production practices, and discusses the econometric results of the frontier model.
Which keywords best characterize this work?
Key terms include Sesame, Technical Efficiency, Smallholder farmers, Stochastic production function, and Agricultural Economics.
What was the average technical efficiency found among the sampled farmers?
The study found a mean technical efficiency of 0.69, suggesting that farmers could potentially increase their output by 31 percent under the current technological level.
Which factors were found to significantly influence technical efficiency?
Factors such as age, education level of the household head, credit availability, extension contacts, and involvement in off-farm activities were identified as significant determinants of efficiency.
How does the study view the role of off-farm activities?
The study concludes that off-farm activities positively affect technical efficiency, as the income generated helps farmers purchase essential agricultural inputs.
- Citation du texte
- Abel Manaye (Auteur), 2016, Technical Efficiency of Sesame Production, Munich, GRIN Verlag, https://www.grin.com/document/368174
