Economic Efficiency of Potato Production by Smallholder Farmers in West Arsi Zone, Oromia Region Ethiopia

Abstract

This study investigated Economic Efficiency of Potato Production in West Arsi Zone, Oromia Region, Ethiopia. Structured questionnaires were used to collect data from 117 respondents randomly selected from designated locations in West Arsi Zone. A stochastic production frontier function was fitted to the sample households. The result revealed that the mean TE, AE and EE was about 75.60%, 91.41% and 69.07% of for potato production. The sum of the partial elasticity of all inputs were 1.17 for Potato indicating an increase in all inputs at the sample mean by one percent increase by 1.17%. This indicates that the production function is characterized by increasing returns to scale productions. The result of Tobit model estimation indicated that the technical efficiency of Potato production in West Arsi Zone is significantly influenced by the variables potato farming experience, education level, social participation and Extension contact affect efficiency positively while, distance to FTC affect technical efficiency negatively. The mean potato yield difference between sample farmer due to technical efficiency variation was 31.04 qt per ha. District office of Agriculture, stockholders and concerned bodies should focus on farmers experience sharing, providing technical support and farmers practice different social participation to improve his/her income could jointly contribute to the improvement in efficiency of Potato farmers in West Arsi Zone.