Economic Analysis of Potato Production in Bale Highlands, South-eastern Ethiopia

The study was initiated to identify the costs and benefits of economic profitability of potato production and factors affecting potato production at the small-scale farmer's level. This study was conducted in three districts. Purposive and random sampling techniques were applied to select 113 respondents. Primary data was collected directly from the respondent, through interview schedules, key informant interviews, and focus group discussions. Both descriptive statistics and the econometric model, the Cobb-Douglas production function model were used to analyze collected data. The average age of the sample respondent was 42.75 years, while the average household size was found to be 7 family members. The cost-benefit analysis results imply that potato production is profitable in the study area and farmers produce potatoes to improve their livelihood. The model result shows that amount of seed, fertilizer, and fungicide affect potato output significantly at 1%, 1%, and 5% respectively, while human labor was insignificant. The model result depicts that, 56% of the variations in output of potato production could be explained by the explanatory variables included in the model. The biggest problem or constraint faced by potato producer farmers in the area was the lack of improved variety. Therefore, Agricultural Research Centers should have to release improved variety that is relevant to the needs and desires of smallholder farmers.