Crop production efficiency in Eastern Amhara, Ethiopia

Agriculture is essential to Ethiopia’s economy, primarily driven by smallholder farmers. However, challenges such as declining GDP contributions, rising food demand, and environmental issues necessitate improved crop production efficiency. This study examines the technical, allocative, and economic efficiencies of farmers in eastern Amhara, using data from 384 households. The analysis employed descriptive and econometric methods, revealing that all input variables, except for oxen, significantly and positively influenced production. Based on the stochastic frontier model, the mean technical efficiency was 62.48%, while allocative efficiency averaged 86.47% and economic efficiency was 54.11%. The Tobit model results indicated that technical efficiency was significantly affected by factors such as the age of the household head, access to social networks, cultivated land area, irrigation involvement, agricultural experience, and alternative revenue sources. Economic efficiency was influenced by the number of oxen, age of the household head, access to social networks, agricultural experience, irrigation use, extension services, and alternative income sources. Additionally, cultivated land size and agricultural experience were significant determinants of allocative efficiency. The findings suggest that adopting new technologies and improving land management practices could enhance productivity and living standards for smallholder farmers, emphasizing the need for support from development organizations and government initiatives.