TECHNICAL EFFICIENCY OF WHEAT PRODUCING SMALL HOLDER FARMERS: THE CASE OF ARSI NAGELE DISTRICT OF WEST ARSI ZONE OF OROMIA REGIONAL STATE, ETHIOPIA

Wheat is one of the dominant crops and its productivity is low in the study area. This means that it is possible to obtain additional output from existing inputs used, if resource are properly used and efficiently allocated. The aim of this study was to investigate technical efficiency of wheat producing farmers and identify factors affecting technical efficiency of wheat producer farmers in Arsi Nagele West Arsi district of Oromia National Regional State, Ethiopia. Data were collected using a semi-structured questionnaire from 155 randomly selected sample wheat producers in the district in 2020/21 production year. Both descriptive and inferential statistics were used for data analysis. Technical efficiency of sampled farmer in wheat production was estimated and analyzed by Cobb-Douglas functional form in stochastic frontier model (SFM) with single stage estimation method. The estimated SFM indicated that input variables (NPS, Urea, Herbicide, Oxen and labor) were found to be significantly and positively influence wheat production at 1 and 5 percent of significant level respectively. Applying a Cobb-Douglas frontier the study found that the mean technical efficiency of wheat farmers in the production of wheat is 79%. This implies that wheat producers can reduce current level of input application by 21% and produce same output given the existing technological level. The Tobit Model result shows that education level of household head, frequency of extension contact, Livestock holding, Use of credit, record keeping, training, use of improved seed, row planting, time of plowing, time of planting, time of weeding, influences technical efficiency level of wheat farmers in the study area. Therefore, the study suggested the above mentioned significant variables have important for policy implications in that development programs may give fruitful attention so as to mitigate the existing level of inefficiency of farmers in the production of wheat in the study area.