Technical Efficiency of Maize Producing Farmers in Arsi Negelle, Central Rift Valley of Ethiopia: Stochastic Frontier Approach

The study was aimed at analysing the technical efficiency in maize production of smallholder farmers in central rift valley of Ethiopia. Cross sectional data from 138 maize producer farmers were collected during 2011/12 production season. The estimated results of the Cobb-Douglas frontier model with inefficiency variables shows that the mean technical efficiency of the farmers in the production of maize is 88 percent. This implies that maize producers can reduce current level of input application by 12 percent given the existing technological level. The discrepancy ratio gamma ( ), which measures the relative deviation of output from the frontier level due to inefficiency, was about 72.61 percent. This implies that about 66 percent of the variation in maize production (yield) among the sample respondents was attributed to technical inefficiency effects. The estimated stochastic production frontier (SPF) model also indicates that DAP fertilizer, Area, Labor, seed and oxen are significant determinants of maize production level. The estimated SPF model together with the inefficiency parameters shows that family size, frequency of extension contact, distance to market, access to credit and number of weeding significantly determine the efficiency level of the farmers in maize production in the study area. Hence, emphasis should be given to improve the efficiency level of those less efficient farmers by adopting the practices of relatively efficient farmers in the area so that they can be able to operate at the frontier. Because in the short run extension packages can be designed based on local practices of the bestpracticed farms in order to improve the productivity level of farmers producing maize.