Technical efficiency of smallholder wheat farmers: The case of Welmera district, Central Oromia, Ethiopia

Increasing productivity through enhancing efficiency in cereal production in general and in wheat production in particular could be an important pace towards achieving food security. However, the strategic conceptual and empirical analysis in the context of the efficiency, which would guide policy makers and development practitioners in their efforts to revamp cereal productivity, is sparse. This study was undertaken to assess the technical efficiency and factors affecting efficiency of wheat production in Welmera district of Oromia region, Ethiopia. The primary data pertaining to farm production, input usage, and socioeconomic and institutional factors were collected during 2012/13 cropping year through a structured questionnaire from randomly selected 180 wheat farmers. The stochastic frontier and translog functional form with a one-step approach were employed to assess efficiency and factors affecting efficiency in wheat production. The maximum likelihood estimates for the inefficiency parameter depicted that most farmers in the study area were not efficient. The mean technical efficiency was found to be 57%. Factors such as sex, age and education level of the household head, livestock holding, group membership, farm size, fragmentation, tenure status and investment in inorganic fertilizers affect efficiency positively and distance to all weather roads negatively. The finding implies that there is an opportunity to improve technical efficiency among the farmers by 43% through gender-sensitive agricultural intervention, group approach extension, and attention to farmers’ education, scaling out of best farm practices. Key words: Smallholder wheat farms, translog production function, technical efficiency.