ANALYSIS OF TECHNICAL EFFICIENCY OF POTATO PRODUCTION BY FARM HOUSEHOLDS: THE CASE OF LAYGAYINT WOREDA, SOUTH GONDAR ZONE OF AMHARA REGIONAL STATE, ETHIOPIA

Abstract

Potato production in Ethiopia accounts around 9.4 million quintal and in Amhara region it reaches about 3.3 million quintals. The crop has high nutrition content and is an adaptable crop for most agro – climatic conditions. This might be due to technical inefficiency caused by demographic, socio-economic, and institutional related factors. Therefore, this study tried to investigate the factors that affecting technical efficiency of farmer and estimating the mean level of technical efficiency of potato producers in South Gondar zone, Laygayint woreda using cross - sectional data collected from 355 selected sample respondents by using multistage sample in 2023 cropping season. The individual farmers’ technical efficiency level was estimated using Cobb – Douglas type stochastic frontier production function model. The estimation technique employed was maximum likelihood. In this estimation procedure, cultivation area under potato crop, chemical fertilizer, organic fertilizer, seed and number of oxen were the input variables that were found to be important in increasing potato production. The result showed us the average productivity of the potato land per hectare in the study area is around 147 quintal and the mean level of technical efficiency of farmers in producing potato was 72.4 %. It further tells us there is a possibility to improve this level of efficiency by about 27.6 %. On the other hand, the sum of the coefficients of the above listed input variables was 1.43 % showing the increasing returns to scale of inputs. The maximum likelihood estimation result has also indicated the determinants of technical efficiency. Among those determinants, age square and off – farm activity was found to reduce the efficiency level whereas, age, family size, education, hoeing and extension contact were the positive contributors for the efficiency enhancement. Hence, emphasis should be given to improve the technical efficiency level of those less efficient farmers by taking in to consideration the adoption of practices by those relatively efficient farmers in the area so that they can narrow the gap between their level of production and the frontier output. Therefore, government bodies and other organizations who are working on the area of potato crop production should consider the above-mentioned significant socio – economic and institutional factors to improve the potato productivity per hectare. They should also think about undertaking further studies to formulate short run extension packages.