Do smallholder farmers ensure resource use efficiency in developing countries? Technical efficiency of sesame production in Western Tigrai, Ethiopia

Abstract

The study was designed to analyze the technical efficiency of input use among the sesame producer farmers in Maykadra Kebelle, Kafta-Humera district, Tigrai, Ethiopia; identified factors that influence farmers resource use efficiency. Primary and secondary data sources were used and random sampling method was applied to select 187 sample sesame producers. Primary data were collected using structured questionnaire interview. Tobit two-stage model was employed to estimate farmers resource efficiency of sesame production. In the first stage, Data Envelopment Analysis (DEA) was used to analyze farmers technical and scale efficiency. In the second stage, factors that influence farmers resource use efficiency were identified using the Tobit model. The DEA result indicated that the technical and scale efficiency of sesame producer farmers were 52% and 55% respectively. The result also revealed that under-utilization of the production inputs under consideration, especially land size and amount of seed used. Moreover, farmers’ planting method (P = 0.030∗∗), age of the household head (P = 0.042∗∗), land size (P = 0.002∗∗∗), education of the household head (P = 0.001∗∗∗), and total asset owned (P = 0.024∗∗) were associated with farmers optimal input-output mix of sesame production. As a result, it can be concluded that smallholder farmers in the study area were inefficient in using inputs in sesame production. Therefore, the current inefficiency in sesame production could be improved by giving special attention and working on the factors that affect optimal input-output mix at the farm level.