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Determinants of Technical Efficiency in Maize Production: The
Case of Smallholder Farmers in Dhidhessa District of Illuababora
Zone, Ethioia

*ondimu +efa,e !-orresponding aut.or#
Jimma /niversit, -ollege of 'eterinar, 0edicine( -1S-1"E "ro2ect &ffice( ".&. 3o4 57
Email6 wendet778gmail.com(

9assen 3es.ir
*ollo /niversit,( Department of 1gricultural Economics !Second 1ut.or#( ".&. 3o4 11)%( Et.iopia
Email6 .assen.ussien8gmail.com

!bstract
+.is stud, was conducted in D.id.essa district of Illuababora :one in Et.iopia to measure t.e level of tec.nical
efficienc, and identif, its determinants in mai:e crop. 1 multi-stage sampling tec.ni;ue was emplo,ed to select
1<2 mai:e growing sample .ouse.olds. Inferential statistics and stoc.astic production functions were emplo,ed
to ac.ieve and interpret t.e result pertaining to ob2ectives of t.e stud,. +.e Stoc.astic "roduction =rontier !S"=#
result revealed t.at area allocated under mai:e and c.emical fertili:ers were appeared to be significantl,
influencing mai:e production at 1 percent probabilit, level. +.e estimated gamma parameters indicated t.at 75>
of t.e total variation in mai:e output was due to tec.nical inefficienc,. +.e average tec.nical efficienc, was $<>
w.ile return to scale !?+S# was .7< >.3ased on t.e results( it was concluded t.at t.ere e4isted scope for
increasing mai:e output b, 1) percent t.roug. efficient use of e4isting resources on t.e sample .ouse.olds. 3,
improving t.e efficienc, of mai:e production even t.roug. efficient use of e4isting resources of t.e farmers( an
additional output of 2< ;uintals of mai:e could .ave been produced on 7%% .ectares of land allocated under
mai:e production during t.e stud, period in t.e district. +.us( ample scope e4isted to reali:e .ig.er output wit.
e4isting resources and level of production tec.nolog,. +.e socio-economic variables t.at e4ercised important
role for variations in tec.nical efficienc, were age( education( improved seed( training on mai:e production and
labor availabilit, in t.e .ouse.old. Nevert.eless( participation on off farm income( interaction of off farm
income and education( distance to mar@et( and number of livestoc@ were found to decrease efficienc,
significantl, among farm .ouse.old. +.erefore( innovative institutional arrangement( education and farmers
training accompanied wit. more access to fertili:er and improved seed were li@el, to en.ance production
efficienc, in t.e stud, area.
"ey#ords: +ec.nical efficienc,( mai:e production( Stoc.astic =rontier( D.id.essa district

$% I&T'(D)CTI(&
0ai:e was originated in -entral 1merica and introduced to *est 1frica in t.e earl,1<t. -entur, !=1&(1772#
and to Et.iopia between t.e 1<t. and t.e 17t. !0c-ann( 2%#. It is 1fricaAs second most important food crop(
after cassava( and is grown in a wide range of environments. "er capita consumption of mai:e in 1frica is
.ig.est in eastern and sout.ern 1frica. 0ai:e is processed to offer various product ranges( w.ic. include w.ole
mai:e meal flour( sifted mai:e meal( vegetable oil( flour for confectioner,( doug.( corn fla@es( snac@s and
crac@ers( starc. converted to process sugars li@e glucose s,rup and de4trose !Noa.(2%#.
0ai:e is one of t.e cereal crop produced in most part of Et.iopia. In 27B$( mai:e production was
)2 million ;t( ) percent .ig.er t.an teff and 7% percent .ig.er t.an w.eat production. *it. an average ,ield of
17.) ;t per .ectare !e;ual to 52 million ;t grown over 1.$ million .ectares# from 177% to 2$( mai:e .as been
t.e leading cereal crop in Et.iopia since t.e mid-177s in terms of bot. crop ,ield and production !?as.id eta.l(
21#. In t.e ,ear 2$B7( cereals contributed $).<7> !about 1)).7< million ;t# of t.e grain production in
Et.iopia. =rom w.ic. mai:e( w.eat( teff and sorg.um made up 22.77> !57.52million ;t#( 1).$5> !2%.57 million
;t#( 17.<7> !5.2$ million ;t# and 1<.5$> !2$.) million ;t# of t.e grain production( respectivel,. +.e average
,ield of cereals namel, mai:e( w.eat and teff were 22.2)( 17.)< and 12.22 ;t per .ectare( respectivel, !-S1(
27#. 0oreover t.e surve, made b, international food polic, researc.( indicated t.at in &romi,a region(
average mai:e ,ields were 7> .ig.er w.en improved seed and fertili:er were used as compared to t.e local
seed wit.out fertili:er. It indicates t.e e4istence of more t.an )> ,ield potential for furt.er improvement based
on results from researc. stations !Cins.en Diao( 21#.
1ccording to -S1 !27# in Illuababora :one( 2$(%1<.7 .a of land allocated for cereal crop
cultivation out of w.ic. 77(177.7$ .a !57># was covered b, mai:e alone. In t.is :one t.e total production of
mai:e reac.ed 1.7% million ;t wit. an average ,ield of 22.71 ;t per .a as compared to t.e regional average of
25.55 ;t per .a. In D.id.essa district t.e average ,ield of mai:e was less t.an t.e :onal average t.oug. more
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proportion of land was allocated for mai:e relative to t.e ot.er cereal crops.
*it. 2.7> population increases( people are being pus.ed to new lands and man, into marginal lands.
&ne of t.e enormous c.allenges in t.e drive to increase food to feed t.e growing population will be to raise
productivit, and efficienc, in t.e agricultural sector !-S1( 27#. 9ence t.e main motivation of efficienc, and
productivit, studies were t.e need to investigate and understand t.e forces t.at drive mai:e productivit, in order
to anal,:e and recommend appropriate improvement measures.
1s a result( e4amining t.e optimum utili:ation of t.e seeds( inorganic fertili:ers and labor utili:ed wit.
respect to productivit, of mai:e could be considered as a one-step forward towards bridging t.e e4isting
information gap. Specialt,( t.e information generated would provide direction for t.e reali:ation of t.e two
national pro2ects namel, 1gricultural Drowt. "rogram !1D"# and -apacit, 3uilding for Scaling up of Evidence
3ased 3est "ractices in 1griculture "roduction in Et.iopia !-1S-1"E#. In D.id.esa woreda( t.e 1D" is aimed
primaril, at increasing agricultural productivit,( en.ancing mar@et performance and facilitating value addition in
selected targeted areas w.ile t.e -1S-1"E pro2ect is designed to assist t.e activities deplo,ed under 1D" b,
furt.er strengt.ening t.e capacit, of 1D" sta@e.olders in identif,ing( documenting and disseminating best
practices in agricultural production. !-1S-1"E( 211E 1D"( 211#.
+.erefore( t.e aim of t.is stud, was to estimate t.e levels of tec.nical efficienc, and identif, factors
influencing levels of tec.nical efficienc, of small.older mai:e producers in D.id.essa district of Illubabor Fone.
+.is .as a paramount contribution to gain deep insig.t to understand c.allenges and constraints in mai:e
production b, indicating avenues for possible polic, intervention towards improving mai:e productivit,.

*% MET+(D(,(-. of the study
2.1 Description of the Study Area
+.is stud, was conducted in D.id.essa district at Illubabor :one of &romi,a ?egional state( Et.iopia. +.e
district is surrounded b, Datira district in west( Dec.i in t.e nort. and Dumma, district in t.e sout. and Doma
district in east. 1ccording to D.id.essa district 0o?D office( t.e district covers appro4imatel, an area of 75($%%
.a. 0oreover t.e &romia liveli.ood :one report of 27 indicated t.at t.e dominant agro ecolog, :one is
midlands or woinadega w.ile. t.e topograp., is predominantl, plains wit. some gentle undulating slopes. +.e
mean annual temperature is 2.7G- and annual rainfall is one of t.e .ig.est in t.e countr, receiving 12-17
mm per ,ear. ?ain fed agriculture is t.e main source of liveli.ood in t.e area. +.e soil is fertile loam soil wit. a
potential possessing moderate productivit,. +.e main rain, season( genna( lasts from end of 1pril to &ctober
w.ile arfasa lasts from Januar, to 1pril. 0a2or food crops produced are mai:e( sorg.um and teff w.ile t.e
common cas. crops are coffee and c.at. It is a ma2or coffee producing area w.ic. supplies mar@ets wit. e4port
;ualit, coffee. !+efera et al.(211#.
*%* Samlin/ Techni0ue and Samle size
0ultistage sampling tec.ni;ue was used to select t.e sample respondents. =rom Illuababora :one( D.id.essa
district was selected purposivel, based on accessibilit, for t.e stud,. +.ere were 22 @ebeles in D.id.essa district
w.ere mai:e cultivation was carried on e4tensivel,. &ut of t.ese 22 mai:e producing @ebeles( ) @ebeles were
selected randoml,. 1 complete list of all farmers growing mai:e along wit. t.eir operational si:e of t.eir
land.olding and area allocated under mai:e was prepared. =inall, 1<2 farmers from four @ebeles were randoml,
selected in probabilit, proportion to number of farmers in eac. @ebeles. +.us a t.ree stage sampling tec.ni;ue
was followed in selecting t.e sample .ouse.olds.!1ppendi4 1#.
*%1% Data Collection
"rimar, and secondar, data were collected. +.e data pertaining to output obtained and ;uantit, of various
inputs used in mai:e production were collected. +.ese include output obtained per plot( t.e ;uantit, of inputs
suc. as .uman labor( o4en labor( ;uantit, of seed and amount of fertili:er used. In addition( demograp.ic( socio-
economic and institutional data were collected from t.e sample respondents. Secondar, data related to mai:e
production were collected to clarif, and support anal,sis and interpretation of primar, data. Secondar, data were
also obtained from reports of similar studies and informationAs documented at various office levels of 0o1?D.
2.4 Method of Analysis
Descriptive and inferential statistics along wit. econometric models were used to anal,:e t.e data. Descriptive
statistics suc. as mean( standard deviation( fre;uenc, and percentage were emplo,ed to anal,:e t.e data
collected on socio-economic( institutional and agro ecological c.aracteristics of t.e sample .ouse.olds.
Inferential statistics suc. as t-test and c.i-s;uare!C2# tests were used to underta@e statistical tests on different
continuous and categorical data( respectivel,. +.e econometric anal,ses follow t.e following processes. In t.e
first step( t.e data was c.ec@ed for regression model assumption including outliers( multicollinearit, and
.eteroscedasticit, and model specification test. =inall,( t.e data were anal,:ed using stoc.astic frontier approac.
b, =?&N+I? 'ersion ).1 !-oelli(177<a#.
*%2 Stochastic frontier aroach to measure efficiency
+.e t.eor, and concept of measurement of tec.nical efficienc, .as been lin@ed to t.e use of production
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functions. Different tec.ni;ues .ave been emplo,ed to eit.er calculate !non-parametric# or estimate !parametric#
t.e efficient frontiers. +.ese tec.ni;ues are classified as parametric and non-parametric met.ods. =arrell !17%7#
was t.e first to formulate a non-parametric frontier met.od to measure production !economic# efficienc, of a
firm. 1ccording to .im( efficienc, ratios are calculated from sample observations. 9e defined tec.nical(
allocative and economic efficiencies. +ec.nical efficienc, !+E# reflects t.e abilit, of a firm to obtain ma4imum
output from a given resources.
+.e stoc.astic frontier production model was emplo,ed to anal,:e and measure tec.nical efficienc, b,
estimating a production function. +.e t.ree production functions tested to estimate a frontier were -obb-Douglas(
+ranslog( and Huadratic production function. +.e stoc.astic frontier approac. splits t.e deviation !error term#
into two parts to accommodate factors w.ic. are purel, random and are out of t.e control of t.e farmers. &ne
component is t.e tec.nical inefficienc, of a firm and t.e ot.er component is random s.oc@s !w.ite noise# suc.
as bad weat.er( measurement error( bad luc@( omission of variables and so on. +.e model was e4pressed as6

+ + =
i
e
ij i i
X Y e4p ln ln

IIIIIIIIIIIIIIII.!1#
*.ere
ln -denotes t.e natural logarit.mE i represents t.e it. farmer in t.e sample(
Ji -represents ,ield of mai:e output of t.e it. farmer !HtB.a#(
Ci2 -refers to t.e farm inputs of t.e it. farmer
eiK vi-ui w.ic. is t.e residual random term composed of two elements vi and ui.
+.e vi is a s,mmetric component and permits a random variation in output due to factors suc. as weat.er(
omitted variables and ot.er e4ogenous s.oc@s.
+.e vis are assumed to be independentl, and identicall, distributed N !(L2v#( independent of ui.. +.e ot.er
component( uis( is non-negative random variable and reflects t.e tec.nical inefficienc, relative to t.e stoc.astic
frontier. +.e ui s are assumed to be independentl, and identicall, distributed as .alf-normal( uMNN !( L2v#N. +.e
parameters O( L2K Lv2PLu2 and QK Lu2B L2 of t.e above stoc.astic production function can be estimated using
ma4imum-li@eli.ood met.od( w.ic. is consistent and as,mptoticall, efficient !1igner et al.( 1777#.
*%3 Production function 4ariables
+.e tec.nical efficienc, of mai:e producer in D.id.essa was measured b, considering t.e output obtained per
plot of t.e it. farmer as t.e dependent variable. +.e output of mai:e was measured in ;uintals during t.e 211
production ,ear. +.e independent variables were t.e inputs !factors# of production used in t.e same production
,ear. 1ccordingl, t.e relevant inputs considered and t.e variables t.at were used in t.e stoc.astic frontier model
were defined as follows
*.ere6
J - is t.e output of mai:e obtained from t.e it. plot !HtlB.a#E
C1-t.e number of draug.t !o4en# power used per plot measured in o4en da,s B.a
C2- t.e number of pre-.arvest .uman labor da,s per plot !0an da,sB.a#
C5- t.e cost of mai:e seed used on t.e it. plot !3irrB.a# E
C) -t.e cost of fertili:er !/rea and D1"# used on t.e it. plot !3irrB.a#E
C%- 1rea planted under mai:e for it. plot measured in .ectareE
Rn-Natural logarit.m
=unctional =orms of stoc.astic frontier
+.e -obb-Douglas form of stoc.astic frontier production was as follows

+.e second specification was t.e +ranslog model( w.ic. is given b, stoc.astic frontier production

+.e translog production function is supposed to be fle4ible functional form in production stud,. +.is functional
form is preferred to ot.ers for its fle4ibilit, in providing appro4imation to an, twice-differentiable function and
for its abilit, to capture interaction among inputs. 9owever( one of t.e s.ort-comings of t.e +ranslog function is
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t.e problem of multicollinearit, !San@.a,an( 17$$#.
1s a special case of translog function( t.e -obb-Douglas production function be.aved properl, in deriving t.e
dual cost frontier and itAs conveniences in estimation and interpretation of parameter estimates relative to ot.er
functional forms. Nevert.eless( t.e -obb-Douglas functional form imposes severe restriction on t.e tec.nolog,
b, restricting t.e production elasticit, to be constant and t.e elasticit, of input substitution to be unit,. &n t.e
ot.er .and( t.e translog functional form imposes no restrictions upon returns to scale or substitution possibilities
!-oelli et al.( 177$#.+.e t.ird specification of t.e stoc.astic frontier model is t.e ;uadratic form( w.ic. is
defined as6

+.e inefficienc, model is estimated from t.e e;uation given below.


+.e is t.e variable in t.e inefficienc, variables
'eturns to scale
?eturns to scale is e;ual to t.e summation of t.e production elasticit, of eac. input and .as been defined in t.e
following e;uation6


*%5 6ariables included in the determinants of inefficiency model
+.e tec.nical inefficienc, ! # could be estimated b, subtracting +E from unit,. +.e function determining t.e
tec.nical inefficienc, effect is defined in its general form as a linear function of socio-economic and
management factors. It can be defined in t.e following e;uation6
IIIIIIIIIIIIIIIIIIIIIIII7
*.ere( is t.e tec.nical inefficienc, effect( S@ is t.e coefficient of e4planator, variables. +.e Fi variables
represent t.e socio-economic c.aracteristics of t.e farm e4plaining inefficienc, and ma, not be functions of ,.
1s a result t.e tec.nical inefficienc, could be e4plained b, t.e following determinants6
Fi1 K 1ge of t.e .ouse.old .ead !,ears#E K Education !number of ,ears of sc.ooling of t.e farmer#E Fi5 K
Improved seed !1 dumm, variable. It ta@es a value of 1 if ,es( ot.erwise#E Fi) K &ff-farm income !1 dumm,
variable. It ta@es a value of 1if ,es( ot.erwise#E Fi% K +raining !1 dumm, variable. It ta@es a value of 1 if ,es(
ot.erwise#E Fi<KRand fragmentation !it include t.e total number of plots at different locations#E Fi7 K Rabor
availabilit, !Rabor force availabilit, is measured in man e;uivalent for farming in t.e .ouse.old#E Fi$K Distance
to mai:e plot measured in @mE Fi7 K Number of livestoc@ measured b, +R/E Fi1K Education and off farm
income interactionE Fi11 K Distance to mar@et Fi15 K "articipation in off farm income and labor availabilit,
interaction.

1% 'esults and Discussion
1%$ +yothesis testin/ and model robustness
3efore estimation of tec.nical efficienc, and anal,sis of its determinants( t.e presence of multicollinearit, in
e4planator, variables was e4amined. 0oreover t.e parameter estimates of t.e production frontier and t.e
validit, of t.e model used for t.e anal,sis were investigated. +.e .,pot.eses were tested using t.e generali:ed
Ri@eli.ood ?atio !R?#. Denerali:ed Ri@eli.ood ratio computation was defined as R? K T2 Uln R9 V lnR91W
*.ere
R?K Rog li@eli.ood ratio
R9o K'alue of log li@eli.ood of null .,pot.esis
R91K 'alue of log li@eli.ood of alternate .,pot.esis
mXKdegree of freedomK number of restrictionsK number of estimated inputs and inefficienc, variables in t.e
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current model !alternate .,pot.esis# minus number of estimated inputs and inefficienc, variables in t.e
preceding model !null .,pot.esis#.
+.e null .,pot.esis was re2ected w.en R?! calculated C2 mX# Y tabulated C2 mX. If t.e null .,pot.esis was true(
t.e test statistic .ad appro4imatel, a C2 distribution or mi4ed C2 distribution wit. degrees of freedom e;ual to
t.e difference between t.e number of parameters specified in t.e null .,pot.esis and alternative .,pot.esis.
0oreover t.e Rog-Ri@eli.ood ratio was used to test t.e null .,pot.esis t.at t.e inefficienc, component of total
error term is e;ual to :ero ! K # against t.e alternate .,pot.esis t.at t.e inefficienc, component is greater t.an
:ero ! Y #. +.us( t.e log li@eli.ood ratio was calculated and compared wit. t.e critical value of C2 wit. one
degree of freedom at %> level of significance.
In summar,( t.e following tests were carried out for testing t.e functional forms( inefficienc, effects and
determinants of coefficients for mai:e farmers in t.e stud, areas6
!1# =rontier model specification for t.e data is -obb-Douglas production function.
+.at is 9 6 --D ! O< III O2K# is an ade;uate representation of t.e production function.
9116 +ranslog production function is ade;uate representation of t.e production function. 9ere O< III O2
represents ;uadratic and interaction terms of +ranslog production function
!2# =rontier model specification for t.e data is -obb-Douglas production function. is an ade;uate representation
of t.e production function
9ere 9K Huadratic production function6 !O< III O1K#
91 is implies t.at Huadratic production function is ade;uate representation of production function. 9ere O< to
O1 represent t.e ;uadratic terms.
!5# +.ere is no inefficienc, effect t.at is 6 9KK#
!)#. +.e coefficients of determinants of inefficienc, model e;uals :ero t.at is 9KK2IIK12 K
+able 1. =unctional forms of t.e production functions for 0R estimate
'ariable "arameter
+ranslog -obb-Douglas Huadratic
-oeff. SE -oeff. SE -oeff. SE
Intercept O .$< .75 2.)75XXX .2$< 5.1<7XXX .<$5
Rno4en O1 2.$<XXX .71 .2) .71 .<% .12$
Rnlabor O2 1.5XXX .)1 .$7XX .)$ .75 .25
Rnseed O5 -.%5X .5% .25 .5% -.51% .27%
Rnfert O) -.<XX .% .%7XXX .5 .%7XXX .<
Rnarea O% 1.5$XX .<7 .77XXX .<$ .$12XXX .1$
Rno42 O< -.1)XX .$ -.7 .55
Rnlbor2 O7 -.12XX .% . .5
Rnseed2 O$ .) .) .57 .5
Rnfert2 O7 .2X .1 .1 .<
Rnarea2 O1 .21 .1) .1< .<2
Rno4Xlnlbor O11 -.)7XX .22
Rno4Xlnseed O12 -.7 .15
Rno4enXlnfert O15 .%XXX .2
Rno4enXRn1rea O1) .%1XX .27
RnlaborXlnseed O1% .) .%
RnlaborXRnfert O1< . .1
RnlaborXln1rea O17 -.2 .15
RnseedXRnfert O1$ .1XX .1
RnseedXRnarea O17 -.1 .7
RnfertXRnarea O2 -.1 .2
Sigma-s;uared .1$XXX .5 .2$ .<) .277XXX .<7
Damma .<<XXX .7 .755 .7< .7)XXX .75
0ean efficienc, .$7 .$< .$<
RR function -27.27 -).%2$ -57.171
X( XX( XXX implies significant at 1>(%> and 1> probabilit, level respectivel,
Source6 own computation( 211
1%* 'esults of the hyotheses test
+.e formulation and results of different .,pot.eses !model selection( inefficienc, effect( determinants of
coefficients# are presented in +able 1. 1ll t.e .,pot.eses were tested b, using generali:ed li@eli.ood-ratio !R?#.
+.e first .,pot.esis related to t.e appropriateness of t.e -obb-Douglas functional form in preference to translog
model. +.e computed R? statistic was less t.an t.e table value at %> significance level. +.e null .,pot.esis was
accepted b, indicating t.at t.e -obb-Douglas functional form is a better representation of t.e data. +.ese
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s.owed t.at t.e coefficients of t.e interaction terms and t.e s;uare specifications of t.e input variables under t.e
+ranslog specifications were not different from :ero.
+able 2. Summar, of .,pot.eses for parameters of stoc.astic frontier and inefficienc, effects
9,pot.esis df R9 R91
-alculated
C2 !R?#
-ritical
C2
Decision
1. "roduction =unction is -obb-Douglas
9 6 --D ! O<I.O2K#E
91 6 +ranslog production function 1% -).%) -27.27 22.% 2% 1ccepted
2. "roduction =unction is -obb-Douglas 9 6
--D ! O<I.O1K#E
91 6 Huadratic production function % -).%) -57.17 2.< 11 1ccepted
5. 96 ZK distribution assumption 1 %5.7% %).$% 2.2 2.71 1ccepted
). +.ere is no inefficienc, component
!96 K#
1 -%7.77 -).%5 5).$ 5.$) ?e2ected
%. +.e coefficients of determinants of
inefficienc, model e;uals :ero
9KK2IIK12 K 12 -%5.7% -).5 2<.7 2% ?e2ected
Source6 &wn -omputation( 211
+.e second .,pot.esis related to t.e appropriateness of t.e -obb-Douglas in preference to t.e ;uadratic
functional form. +.is .,pot.esis was also accepted at %> level of significance and indicated t.at -obb-Douglas
functional form was again a better formulation t.an t.e Huadratic functional form. 9ence t.e coefficients of t.e
s;uare specifications of t.e input variables under t.e Huadratic specifications were not different from :ero. 1fter
testing bot. +ranslog and Huadratic function to determine w.et.er t.ere was ade;uate representation of t.e data(
and found conclusive evidence t.at t.e, were not. 9ence( -D production function was t.e best to fit t.e data for
estimation of tec.nical efficienc, for mai:e producing farm .ouse.old in t.e stud, area.
+.e t.ird test conducted was( given suc. functional forms for t.e sample .ouse.oldsE it was
considered w.et.er t.e tec.nical efficienc, levels were better estimated using a .alf normal or a truncated
normal distribution of Zi. +.e results indicated t.at t.e .alf normal distribution was appropriate for t.e sample
.ouse.olds in t.e stud, area as t.e calculated R? value of 2.2 was less t.an t.e critical C2 value of 2.71 at %>
significance level.
+.e fourt. .,pot.esis was tested for t.e e4istence of t.e inefficienc, component of t.e total error term
of t.e stoc.astic production function. In ot.er words( it was concluded w.et.er t.e average production function
!wit.out considering t.e non-negative random error term# best fits t.e data. 9ence( t.e fourt. .,pot.esis stated
t.at K( was re2ected at t.e %> level of significance confirming t.at inefficiencies e4isted and were indeed
stoc.astic !R? statistic 5).$Y [21(.7% K2.71 #. +.e coefficient for t.e parameter could be interpreted in suc. a
wa, t.at about 75 percent of t.e variabilit, in mai:e output in t.e stud, area was attributable to tec.nical
inefficienc, effect( w.ile t.e remaining about 27 percent variation in output was due to t.e effect of random
noise. +.is implies t.at t.ere was a scope for improving output of mai:e b, first identif,ing t.ose institutional(
socioeconomic and farm specific factors causing t.is variation.
+.e fift. .,pot.esis w.ic. stated t.e tec.nical inefficienc, effects were not related to t.e variables
specified in t.e inefficienc, effect model( was also re2ected at t.e %> level of significance !R? statistic 2<.7 Y
[212(.7% K2%#. +.us t.e observed inefficienc, among t.e mai:e farmers in D.id.essa could be attributed to t.e
variables specified in t.e model and t.e variables e4ercised a significant role in e4plaining t.e observed
inefficienc,.
1%1 Parameter estimates of the SPF model
+able 5 presents t.e results of bot. t.e &RS and 0R estimates. In total nineteen parameters were estimated in t.e
stoc.astic production frontier model including five in t.e --D production frontier model( and twelve e4planator,
variables were .,pot.esi:ed to influence t.e tec.nical efficienc, scores w.ile t.e remaining two being t.e
parameters associated wit. t.e distribution of Zi and vi. &ut of t.e nineteen parameters estimated( twelve were
statisticall, significant. =rom twelve significant parameters( five were significant at one percent levelE t.e same
numbers of variables were significant at five percent level w.ile t.e remaining two were significant at 1 percent
level of significance.
During t.e estimation( a single estimation procedure was applied using t.e -D functional form. +.e
computer program =?&N+IE? version ).1 gave t.e value of t.e parameter estimations for t.e frontier model
and t.e value of 2. 0oreover it gave t.e value of Rog-li@eli.ood function for bot. &RS estimations and t.e
stoc.astic production function. +.e 0a4imum Ri@eli.ood estimates of t.e parameter of S"= functions toget.er
wit. t.e inefficienc, effects model are presented in table 5 below.
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+able 5. -obb-Douglas stoc.astic production frontier 0a4imum li@eli.ood and &RS estimate
XXX( XX implies significant at 1> and %> probabilit, level( respectivel,
Source6 &wn -omputation( 211
1%7 6ariability in outut due to difference in the technical efficiency
+.e 0a4imum Ri@eli.ood estimation of t.e frontier model gave t.e value for t.e parameter !Q#( w.ic. is t.e
ratio of t.e variance of t.e inefficienc, component to t.e total error term !QK

u2B!

v2P

2u# K

u2B

s2.
+.e Q value indicated t.e relative variabilit, of t.e one sided error term to t.e total error-term. In ot.er words( it
measured t.e e4tent of variabilit, between observed and frontier output t.at is affected b, t.e tec.nical
inefficienc,.
1s a result t.e total variation in output from t.e ma4imum ma, not necessaril, caused efficienc,
differentials among t.e sample .ouse.olds. 9ence( t.e disturbance term .ad also contributed in var,ing t.e
output level. In t.is case( it was crucial in determining t.e relative contribution of bot. usual random noises and
t.e inefficienc, component in total variabilit,. +.e +E anal,sis revealed t.at tec.nical efficienc, score of
sample farms varied from 2)> to 7<>( wit. t.e mean efficienc, level being $<>. +.is variation was also
confirmed b, t.e value of gamma !# t.at was .75. +.e gamma value of .75 suggested t.at 75> variation in
output was due to t.e differences in tec.nical efficiencies of farm .ouse.old in D.id.essa w.ile t.e remaining
27> was due to t.e effect of t.e disturbance term. 0oreover( t.e corresponding variance-ratio parameter implied
t.at 1) > differences between observed and ma4imum frontier output for mai:e was due to t.e e4isting
differences in efficienc, among t.e sample farms. +.ese provided opportunit, for improving mai:e output b,
investigating factors t.at influence efficienc, in order to improve t.e productivit, of mai:e in t.e stud, area.

1%2 Estimated actual and otential le4el of outut
1ppl,ing e;uation $ below t.e potential attainable level of mai:e ,ield per .a was obtained. +.e difference
between t.e actual level and t.e frontier level of output was computed b, estimating t.e individual and t.e mean
level of frontier output. =rom t.e stoc.astic model in e;uation !12#( t.e actual output was given b,6 Ji6 e4p !Ci
OP 'i-/i#. =rom t.is e;uation( tec.nical efficienc, !e4p-ui# is given as
+EiK JiBJiX IIIIIIIIIIIIIIIIIIIIIIII$
*.ere +Ei K tec.nical efficienc, of t.e it. .ouse.old in mai:e production
JiX K t.e frontier output of t.e it. .ouse.old in mai:e production(
Ji K t.e actual output of t.e it. .ouse.old in mai:e production.
+.en JiX K JiB+Ei K e4p !Ci O P 'i-/i#Be4p !-/i# K e4p !Ci O P 'i#III..7
/sing t.e values of t.e actual output obtained and t.e predicted tec.nical efficienc, indices( t.e potential output
was estimated for eac. sample farm .ouse.olds. +.e mean levels of t.e actual and potential output during t.e
production ,ear were 25.) HtB.a and 2<.$ HtB.a( wit. t.e standard error of 11.$ and 12.)( respectivel,. 0oreover(
paired sample t-test was used on t.e actual and potential ,ield to compare t.e difference in t.e amount of ,ield
between two scenarios. +.ere was a significant difference between potential ,ield and actual ,ield. +.e mean
difference of t.e actual and t.e potential output was found to be statisticall, significant at 1> probabilit, level.
=igure 5 illustrates t.at under t.e e4isting practices t.ere was a scope to increase mai:e ,ield following t.e best-
practiced farms in t.e area.

'ariable "arameter &RS 0RE
-oefficient t-ratio -oefficient t-ratio
Intercept O 2.%5 <.72XXX 2.)75 $.<%XXX
Rn&4 O1 -.1 -.2 .2) .55
Rnlabor O2 .11) 2.27XX .$7 1.$<XX
lnseed O5 .% 1.)1 .25 .<7
Rnc.emfert O) .%7 15.<5XXX .%7 17.$<XXX
Rn1rea O% .712 7.%<XXX .77 11.5%XXX
Inefficienc, effect model
Sigma-s;uared L2 - - .2$ ).57XXX
Damma Q - - .75 7.<%XXX
RR -%7.77 - -).%2 -
+otal sample si:e !N# 1<$ - 1<$ -
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+able ). -omparison of estimated actual ,ield and potential ,ield of sample respondent
Efficienc, categor,
"otential ,ield per .ectare 1ctual ,ield per .ectare
0ean Std. Deviation 0ean Std. Deviation
.2-.7 1$.7 1.<$ 7.)< 7.%
.71-.$1 2<.7 7.57 2.7< 7.%1
.$2-.$< 21.<2 $.< 1$.55 <.$
.$7-.7 2%.75 1.% 22.7) 7.5
1bove . 7 5.21 1).% 2$.% 15.%2
1verage efficient 27.57 12.%7 2).)< 11.7
Ress efficienc, 21.2$ 7.22 1).7 7.$2
&verall 2<.$1 12.)1 25.)7 11.77
Source6 own surve,( 211
"otential ,ield was also calculated for eac. farm and t.e results were presented b, range of tec.nical efficienc,
group. In general( for t.e less efficient farm .ouse.olds t.e recorded average actual ,ield was 1) ;tB.a. +.eir
corresponding averagel, efficient group potential ,ield was 21;tB.a. +.e .ig.est difference between actual and
potential ,ield was anal,:ed for 2> of t.e sample .ouse.old. +.e potential ,ield for t.is group was found to
more t.an %> of t.eir actual ,ield. &n t.e ot.er .and( t.e net magnitude of ,ield improvement t.roug.
efficient utili:ation of e4isting resource for less and averagel, efficient farmers were appro4imatel, 7.2 and
2.%;tB.a. 1t district level( wor@ing towards improving t.e efficienc, of t.e farmers could bring additional ,ield
of 2< ;t of mai:e given 7%% .a of total land area allocated for mai:e production in t.e stud, period. +.ese
findings ma, invite attention of t.e polic, ma@ers and district e4perts to improve t.e efficienc, of t.e farmers
t.roug. adoption of rig.t strateg, to efficientl, utili:e t.e e4isting resource to improve t.e food securit, of t.e
district.

1%3 Determinants of Technical efficiency
+.e focus of t.is anal,sis was to provide an empirical evidence of t.e determinants of productivit,
variabilit,Binefficienc, gaps among small.older mai:e farmers in t.e stud, area. 0erel, .aving @nowledge t.at
farmers were tec.nicall, inefficient mig.t not be useful unless t.e sources of t.e inefficienc, are identified. +.us(
in t.e second stage of t.is anal,sis( t.e stud, investigated farm and farmer-specific attributes t.at .ad impact on
small.oldersA tec.nical efficienc,.
+.e parameters of t.e e4planator, variables in t.e inefficienc, model were simultaneousl, estimated
in a single stage estimation procedure using computer program( =?&N+IE? ).1. +.e dependent variable of t.e
model was inefficienc, and t.e negative signs implied t.at an increase in t.e e4planator, variable would
decrease t.e corresponding level of inefficienc,.
+able % s.owed t.e coefficients of e4planator, variables in t.e inefficienc, model. +.e results s.owed
t.at most of t.e signs related to inefficienc, determinants were as e4pected. +.e model results s.owed t.at
factors suc. as age( education( labor availabilit, improved seed( training( were negativel, related wit.
inefficienc, w.ile off farm activit,( interaction between education and off-farm income( number of livestoc@ and
distance to mar@et were positivel, related wit. inefficienc,. 1lt.oug. distance to mai:e plot and land
fragmentation .ave e4pected sign but did not turn out to be significant.
Education en.ances t.e ac;uisition and utili:ation of information on improved tec.nolog, b, t.e
farmers. +.e results s.owed t.at farmers wit. more ,ears of formal sc.ooling were more efficient t.an t.eir
counterparts !+able %#. +.is result was consistent wit. t.e findings of 1bdulai and Eberlin !21# w.ic.
establis.ed t.at an increase in .uman capital will augment t.e productivit, of farmers. Similar results .ad been
reported in studies w.ic. .ad focused on t.e association between formal education and tec.nical efficienc,
!N,aga@a et al. !27#E =e@adu( 2) and \inde( 2%#. &n t.e ot.er .and t.e age of t.e .ouse.old influenced
inefficienc, negativel,. +.is suggested t.at older farmers were more efficient t.an t.eir ,oung counterparts. +.e
reason for t.is was probabl, because t.e farmers become more s@ill full as t.e, grow older due to cumulative
farming e4periences !Riu and F.ung( 2#. Similar conclusions were made b, &monona !21# and 1wudu
and 9uffman !2#. 0oreover t.e coefficient of t.e dumm, representing t.e use of improved seeds was
statisticall, significant at 1 percent level. +.us( production of mai:e t.roug. t.e use of improved mai:e seeds
resulted in more tec.nical efficienc, as compared to using local seeds. It means t.at t.e tendenc, for an, mai:e
farmers to increase .is production depend on t.e t,pe and ;ualit, of improved seed available at t.e rig.t time of
sowing. +.is was in agreement wit. t.e findings of Ep.raim ! 27#.

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+able %. 0a4imum-li@eli.ood Estimates of tec.nical efficienc, determinants
'ariables -oefficients SE t-ratio
-onstant 1.)7 1.27 1.1)
1ge -.22X .15 -1.7<
Education -.21XX .11 -2.
Improved seed -1.17XX .%7 -1.7$
&ff farm 1ctivit, 1.71XX .77 1.7<
+raining -.%)XXX .25 -2.5)
=ragmentation .1< .15 1.27
Rabor availabilit, -.)5X .27 -1.%$
Distance to mai:e .1 .7 1.7
+R/ .<X .) 1.<7
Education and off-farm income .5XXX .12 2.)2
Distance to mar@et .$X .% 1.%1
&ff farm and Rabor availabilit, -.1%7 .21$ -.72
Sigma s;uare .2$XXX .<) ).5$$
Damma .755XXX .7< 7.<%)
RR -).%2
0ean Efficienc, .$<
?eturns to scale .7%<
X( XX( XXX implies significant at 1>( %> and 1> probabilit, level respectivel,
Source6 own computation( 211
1 number of farmers in t.e stud, areas received training on mai:e for few da,s mainl, on production practices
and importance of using improved pac@age. +.e dumm, coefficient of training was negative and significant in
t.e tec.nical inefficienc, model for mai:e production !table %#. +.is result was in line wit. t.e arguments b,
=e@adu !2)# w.o indicated t.at training given outside localit, relativel, for longer period of time determined
efficienc, positivel, and significantl,. 9asan and Islam !21# and 1bebe !27# also found training to be
positivel, related to tec.nical efficienc,. 0oreover off farm income was positive and significant wit. tec.nical
inefficienc,. +.is implied t.at( farmers w.o participated in off-farm activit, were li@el, to be less efficient in
farming as t.e, s.are t.eir time between farming and ot.er income-generating activities. "roductivit, suffers
w.en an, part of production is neglected. Especiall, in t.e stud, area( due to emplo,ment opportunities
available due e4port commodities suc. as coffee( t.e ma2orit, of t.e farmers neglect weeding of t.eir mai:e crop.
+.is finding was in agreement wit. t.at of 0ariano et al. !21# and Doodness et al.!21#. Similarl,( t.e
interaction between off-farm income and education variable were found to be positive and significant indicating
t.e farmers w.o were educated and engaged in generating off-farm income tended to e4.ibit lower tec.nical
efficienc, levels in mai:e production. +.is mig.t suggested t.at farm .ouse.old academic curiosit, in t.e
e4istence of more profitable coffee enterprise production mig.t dictate t.em to reallocate most of t.eir time
awa, from mai:e crop management related activities. 1s a result t.e farmers use less time to e4ercise mai:e
appropriate mai:e management practices w.ic. was essential for en.ancing tec.nical efficienc, !9uffman and
F.ung( 2#.
In addition t.e coefficient of labor availabilit, was found to be negative and significant in t.e tec.nical
inefficienc, model. +.is implies t.at tec.nical inefficienc, decreases wit. t.e increase in labor availabilit,.
9ence t.e farmers w.o .ad more available labor were better managersE t.erefore( t.e, produced closer to t.eir
production frontier w.ic. is similar wit. 9assen !211#. 0oreover it was .,pot.esi:ed t.at number of livestoc@
influenced tec.nical efficienc, positivel,. Nevert.eless t.e coefficient is found to be significant and negative
wit. tec.nical efficienc,. +.is mig.t be attributed to t.e tendenc, of t.e farmers w.o .eld large number of
livestoc@ reallocated muc. of t.eir time in .erding livestoc@ and .ence less time for crop management. Due to
t.is fact( farmers w.o owned large livestoc@ mig.t be less tec.nical efficient as compared to t.ose w.o
possessed large livestoc@. +.e finding was consistent wit. t.e findings of =e@adu !2)#. =inall,( pro4imit, to
mar@et affected t.e tec.nical efficienc, in different wa,s. +.e .,pot.esis in t.is stud, was t.at .ouse.olds
located near mar@ets were e4pected to .ave .ig.er tec.nical efficienc, t.an t.ose located in remote areas. It was
assumed t.at t.at pro4imit, to mar@ets increased t.e opportunities of farmers to sell t.eir products and purc.ase
input at nearest distance. In contrast( some researc. argued t.at access to mar@ets mig.t increase t.e non-farm
emplo,ment opportunities wit. .ig.er returns t.an from farming( leading farmers to reallocate labor from farm
to non-farm activities. In t.is anal,sis( it was observed t.at pro4imit, to mar@ets reduces tec.nical inefficienc,
levels significantl,. +.e result was consistent wit. t.e finding of 1lemu et al !27#.



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7% S)MM!'., C(&C,)SI(&S and 'EC(MME&D!TI(&S
7%$ Summary and Conclusions
+.e primar, ob2ective of t.is stud, was to anal,:e determinants of tec.nical efficienc, in small.older mai:e
production s,stem in D.id.essa district. +.is was ac.ieved b, measuring t.e efficienc, of small.older mai:e
farmers and identif,ing t.e determinants of tec.nical efficienc,. +.e results obtained from t.e stoc.astic frontier
estimation s.owed t.at inefficienc, was present in mai:e production among small.olders. Sufficient evidence of
positive relations.ip between mai:e productivit, and .ig.er use of intermediate inputs suc. as fertili:er and land
utili:ation were practiced. +.e results of efficienc, anal,sis s.owed t.at small.older farmers could improve t.eir
efficienc, b, operating closer to production frontier. +.us( t.ere e4isted considerable scope to e4pand output and
also productivit, b, decreasing t.e average ,ield gap w.ic. was estimated to be around 55) @gB.a if inputs were
efficientl, utili:ed. 0oreover( for 2> of less efficient sample respondent wor@ing towards t.e improvement of
efficienc, could increase t.e ,ield b, more t.an %>. 1t district level( wor@ing towards improving t.e efficienc,
of t.e farmers could bring additional gross output of 2< ;t of mai:e given 7%% .a of total land area allocated
for mai:e production during t.e stud, period.
+.e above mentioned amount of output and efficienc, of mai:e production could be obtained
significantl, b, pa,ing more attention to t.e determinants of tec.nical efficienc,. Some of t.e areas w.ic.
demand more attention w.ere timel, providing improved mai:e seed and encouraging farmers to use
recommended management practices. In addition tec.nical inefficienc, decreased !i.e. efficienc, increased# wit.
t.e increased in education and training on mai:e production pac@ages. +.us( it was needed in a priorit, basis to
invest in public education to e4plore and develop .uman resources for t.e farm operation and intensif,ing
training in mai:e e4tension pac@ages. 0oreover( t.e average tec.nical efficienc, of mai:e production in
D.id.essa district was $< percent indicating a good potential for increasing mai:e output b, 1) percent wit. t.e
e4isting tec.nolog, and levels of inputs.
In general( t.e e4istence of inefficienc, level in mai:e production and identification of inefficienc,
variables .ad important polic, implications in improving t.e productivit, in t.e stud, area. +.us( integrated
development efforts t.at will improve t.e e4isting level of input use and polic, measures towards decreasing t.e
e4isting level of inefficienc, will .ave paramount importance in improving t.e food securit, in t.e stud, area.
7%* 'ecommendations
1. 3ased on t.e above results( t.e followings recommendations are made6
2. Designing polic, w.ic. encourages t.e e4perience s.aring among farmers wit. regard to utili:ation of
intermediate input would .elp to improve mai:e productivit,. Nevert.eless t.e attention of polic,
ma@ers to mitigate t.e e4isting level of low mai:e productivit, and povert, s.ould not stic@ onl, to t.e
introduction and dissemination of inputs !esp. fertili:er#. Side b, side e;uitable attention .as to be given
towards improving t.e e4isting level of efficienc, at least b, s.aring best practices among farmers
t.roug. field da,s and on farm demonstration.
5. 0ore efforts s.ould be intensified on b, 1gricultural offices in training and encouraging farmers to use
improved agronomic practices t.roug.out t.e stud, area.
). +.ere s.ould be timel, suppl, of fertili:er and ;ualit, improved seed to improve farmersA efficienc, in
production of mai:e.
%. Strengt.ening t.e e4isting e4tension services delivered to farmers specific efforts s.ould be made to
train and monitor farm .ouse.old wit. regard to improved mai:e management practices.

2% 'EFE'E&CEs
1bebe Dagnew( 27. +ec.nical Efficienc, of &nion "roduction /nder Irrigation6 +.e -ase of \alu District of
Sout. *ollo( Et.iopia 0.Sc. +.esis "resented to Sc.ool of Draduate Studies of 1lema,a /niversit,.
1igner( @.( ". Sc.mid and D. Rovell( 1777. =ormulation and estimation of stoc.astic production function models.
Journal of Econometrics. %6 21-57.
1lemu 3amla@u( 9. 3olan and E. Nuppenaud( 27. +ec.nical Efficienc, of =arming S,stems across 1gro-
ecological Fones in Et.iopia6 1n 1pplication of Stoc.astic =rontier 1nal,sis.
1,nalem De:a.egn( 2<. +ec.nical Efficienc, in 0ai:e "roduction6 1 -ase of Small.older =armers in 0ec.a
District( Et.iopia. 1n 0.Sc. +.esis "resented to Sc.ool of Draduate studies of 1lema,a /niversit,.
-oelli +.( D. S. ". ?ao and D. E. 3attese(177$. 1n Introduction to Efficienc, and "roductivit, 1nal,sis( \luwer
1cademic "ublis.ers( Norwel( 0assac.usetts( /.S.1.
-oelli( +. !177<a#. 1 guide to =?&N+IE? version ).16 a computer program for frontier production function
estimation. -E"1 *or@ing "aper 7<B7( Department of Econometrics( /niversit, of New England( 1rmidale(
1ustralia.
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-rops !"rivate "easant 9oldings( # 1ddis 1baba( Et.iopia.
N,aga@a( D.& ( Daniel &.( D.1. &bare and *. Ngu,o( 27. Economic Efficienc, of Small.older Iris. "otato
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2$)
"roducers in \en,a6 1 -ase of N,andarua Nort. District. Department of 1gricultural Economics and
1gribusiness 0anagement( Egerton /niversit,( \en,a.
Ep.raim( 1.( *. -.irwa( 27. Sources of +ec.nical Efficienc, among Small.older 0ai:e =armers in Sout.ern
0alawi. 1frican Economic ?esearc. -onsortium.Nairobi(\en,a.
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Et.iopia. 0.Sc. +.esis "resented to Sc.ool of Draduate Studies of 1lema,a /niversit,.
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3anglades.. 3anglades. J. 1gril. ?es. 5%!1# 6 11-112.
9assen 3es.ir( 211. 1nal,sis of agricultural tec.nolog, adoption and "roduction efficienc,6 t.e case of
small.older farmers in Nort. eastern .ig.lands of Et.iopia. 1 ".D dissertation submitted to t.e college of
agriculture and environmental sciences( Sc.ool of agricultural economics and agribusiness( sc.ool of graduate
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&monona( 3.+.( &.1. Egbeto@un and 1.+. 1@anbi ! 21#. =armers ?esource /se and +ec.nical Efficienc, in
-owpea "roduction in Nigeria. Department of 1gricultural Economics( /niversit, of Ibadan( Ibadan( &,o State(
Nigeria. Economic 1nal,sis ] "olic,( 'ol. ) No. 1.
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&utline Series +.e 0cDraw-9ill -ompanies( Inc. New Jor@.
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+efera 3a,issa( 9a,ilu Sendaba and ?emadan 1bdela( 211. D.id.essa District 1griculture and ?ural
development office ( Development "lan and "rogram of D.id.essa District.
Cins.en( D.( 21. "olicies for 1gricultural Development( "overt, ?eduction and =ood Securit,6+.e -ase Stud,
of Et.iopia. I="?I.

1ppendi4 1
Sampling 0et.od Specification
'er, large sample si:e .as ver, small error in ma@ing decision about t.e population. 9ence t.e following
met.od was used to determine t.e si:e of t.e sample. -onsider a population w.ose mean !_ # is un@nown and
variance ! # is @nown. If a sample si:e n is selected from t.e population( t.e confidence interval is estimated
using t.e sample mean ! # at a desired significance level ! # !Salvatore and ?eagle( 22#.+.en
IIIIIIIIIIIIIIIII1
+.e confidence interval was computed as follows6

If t.e desired accurac, about t.e mean is D( t.en t.e confidence interval was obtained as
confidence interval of
+.erefore(
+.e appropriate sample si:e !n# was determined b, t.e formula !"anneerselvam( 211E 9assen 3es.ir( 211#.
IIIIIIIIIIIIIIII2
*.ere F is considered to be t.e standard normal distribution

=or t.e stud, area( t.e standard deviation for crop output per .a from previous studies was 7$ @g !+efera et al.(
211#. Suppose t.e desired accurac, about t.e mean of crop output per .ectare was wit.in `1% @g wit. a
confidence interval of 7%>. +.erefore( based on t.e formula( in t.e second stage( t.e appropriate sample si:e for
t.e stud, was 1<2 sample farmers or 7.)> of t.e total farmers were selected randoml,.

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