Analysis of Economic Efficiency of Onion Production Under Irrigation in West Shewa Zone, Oromia, Ethiopia

The study was measures efficiencies of Onion Producers under irrigation and identify factors affecting them in in West Shewa Zone, Oromia, Ethiopia. Stochastic production frontier model was used to estimate technical, allocative and economic efficiency levels, whereas Tobit model was used to identify factors affecting efficiency levels. Accordingly, the mean technical, allocative and economic efficiencies of sample households were 74%, 70% and 52%, respectively. Land, seed, herbicide and insecticide, labor and oxen power were positively affected the production of onion. Although, land, seed, herbicide and insecticide were underutilized inputs but labor and oxen power were over-utilized inputs. Results of the Tobit model revealed that land allotted to onion production and credit utilization was affected technical efficiency positively but distance to the FTC was affected technical efficiency negatively. It also revealed that onion production experience, land allotted to onion production, pilot distance, distance to the market were affected allocative efficiency negatively but having own motor pump and extension contact were affected allocative efficiency positively. Besides, Family size, credit utilization and extension contact were positively affected economic efficiency of onion production but pilot distance and distance to the FTC were negatively affected economic efficiency of onion production. Results indicate that there is an opportunity to increase efficiency of onion production under irrigation in the study area. Therefore, zonal and district office of agriculture, stockholders and concerned bodies should focus above mentioned factors to improve the productivity of onion under irrigation.