Technical Inefficiency Determinants in Potato Production: The case of Potato Farmers in Central Highlands of Ethiopia

Abstract

The study identified the factors that cause variation in the level of efficiency in potato production. The study used household level cross sectional data collected in 2015/16 from 196 sample farmers selected by multistage sampling technique. For the data collection, a personally administered structured questionnaire was used. In the analyses, descriptive statistics, a stochastic frontier model (SFM) and a two-limit Tobit regression model were employed. Tobit model revealed that technical efficiency was positively and significantly affected by education, land tenure status, extension service, credit and soil fertility whereas variables such as sex of household head, age of household head, farm size and land fragmentation affected it negatively. Therefore the study suggested the need for policies to discourage land fragmentation and promote education, extension visits, access to credit and soil fertility for improvement in technical efficiency.