Technical Efficiency and Its Determinants among Micro and Small Dairy Enterprises in Hadiya Zone, Central Ethiopia

This study investigates the technical efficiency of micro and small-scale dairy production enterprises and examines the key factors influencing their performance in the Hadiya Zone of Southern Ethiopia. A total of 212 dairy enterprises were selected using a multi-stage sampling method. In addition, data were collected through focus group discussions and interviews with key informants to enhance the qualitative insights. The study applied both descriptive statistics and the stochastic frontier model to estimate efficiency levels. The findings revealed that the average technical efficiency was 60.18%, with micro-level enterprises scoring 60.09% and small-scale enterprises 58.79%. Technical efficiency was significantly affected by variables such as education level, managerial experience, access to training, markets, gender, and credit availability. The results suggest that targeted and differentiated strategies are necessary to address the unique efficiency challenges faced by micro and small dairy enterprises.