Technical Efficiency of Resource Use in the Production of Irrigated Potato: A Study of Farmers Using Modern and Traditional Irrigation Schemes in Awi Zone, Ethiopia

Abstract

Based on cross-sectional data collected from randomly selected 80 farmers in four districts of Awi zone in North-western Ethiopia, this study examines the technical efficiency of farmers in the production of irrigated potato. The stochastic frontier production function, which considers deviation from the frontier to be due to the effect of technical inefficiency and random noise, is used for data analysis. Technical efficiency of farmers was estimated independently for the farms under modern irrigation schemes and traditional irrigation schemes. Using likelihood ratio test, Translog production function is found to be an adequate representation of the production behavior of farms under the two types of schemes.
The mean level of technical efficiency was found to be 77 percent and 97 percent respectively for modern and traditional schemes. Therefore, improving the level of efficiency could raise productivity under modern schemes, whereas improving productivity under traditional schemes needs introduction of new technology as the farmers’ level of production has approached the frontier. Irrigation experience, commodity rate of production and size of livestock are found to be the important variables that determine the level of efficiency.