Technical Efficiency of Maize Production in the Central Rift Valley of Ethiopia: Panel Data Stochastic Frontier Model

Abstract

Maize is staple crop for ensuring food security of the majority of the population. Based on a two-period panel data of 2017 and 2019 production seasons, we examined the efficiency status of 483 maize producing farmers in the central rift valley of Ethiopia. For the analysis, different time-variant panel stochastic frontier estimation models were applied. We found that land, seed, fertilizer, farm labor, and farm tools had significant positive elasticity considering the producers’ efficiency status. The quality of land used for maize production had a significant impact on farm efficiency gain. The covariates of household size, livestock ownership, extension contact, and credit access were also important in reducing the inefficiency of the maize producers. The mean technical efficiency over the panel period was found to be 62%, whereas the time-varying and the time-invariant efficiency components accounted for 86% and 71%, respectively. Despite the observed gap from the recommended rate, the intensity of fertilizer use increased on average by 18.6% during the panel period. Hence, enhanced access to production inputs and the identified determinant factors were important in approaching the higher frontier in maize production in the study areas.

Keywords: maize production, panel data, stochastic frontier analysis, technical efficiency