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Sources of inefficiency and growth in agricultural output in subsistence agriculture: A stochastic frontier analysis

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  • Nisrane, Fantu
  • Berhane, Guush
  • Asrat, Sinafikeh
  • Getachew, Gerawork
  • Taffesse, Alemayehu Seyoum
  • Hoddinott, John F.

Abstract

Studying the sources of growth in agricultural production, examining the extent of inefficiency, and identifying the sources of such inefficiency, is an important step forward to improve the livelihood of subsistence farm households in developing countries. A stochastic frontier analysis is used because, in addition to accounting for sources of growth in agricultural output, this method explicitly incorporates efficiency differences in the analysis. The empirical analysis uses panel data from the Ethiopian Rural Household Survey collected during 1994 through 2009. The results indicate that most of the increase in agricultural output is attained by increased use of traditional inputs such as size and quality of cultivated land, labor, numbers of oxen and hoes, and was heavily influenced by amount of precipitation received. By contrast, the rate of fertilizer application contributed little for increase in output. Participation in the extension program made moderate contribution towards increases in output. Each agroecological zone included in the study gained from Hicks-neutral technological improvements during the 1994–2004 period. Nonetheless productivity levels in 2009 were not different from levels in 1994, and they had declined between 2004 and 2009. Average level of farming efficiency for the surveyed farmers across all the years was 0.46, indicating that an average farmer produces less than half of the value of output produced by the most efficient farmer using the same technology and inputs. However, average farming efficiency has improved during the 1995–2009 period. Farm households’ level of farming efficiency is improved by reducing labor bottlenecks and increased education. Households that have diversified risk from plots that are located sufficiently apart appear more efficient. Households that own more animals both in terms of two or more ploughing oxen or total livestock units are more efficient. Drought affects efficiency adversely whenever it strikes. Farmers that live in close proximity to markets are less efficient. On average, farming inefficiency has consistently declined in the period considered. The results suggest that each agroecological zone is faced with different opportunities and obstacles.

Suggested Citation

  • Nisrane, Fantu & Berhane, Guush & Asrat, Sinafikeh & Getachew, Gerawork & Taffesse, Alemayehu Seyoum & Hoddinott, John F., 2011. "Sources of inefficiency and growth in agricultural output in subsistence agriculture: A stochastic frontier analysis," ESSP working papers 19, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:esspwp:19
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    References listed on IDEAS

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    Cited by:

    1. Michler, Jeffrey D. & Josephson, Anna L., 2017. "To Specialize or Diversify: Agricultural Diversity and Poverty Dynamics in Ethiopia," World Development, Elsevier, vol. 89(C), pages 214-226.
    2. Abro, Zewdu Ayalew & Alemu, Bamlaku Alamirew & Hanjra, Munir A., 2014. "Policies for Agricultural Productivity Growth and Poverty Reduction in Rural Ethiopia," World Development, Elsevier, vol. 59(C), pages 461-474.
    3. Bachewe, Fantu Nisrane & Koru, Bethlehem & Taffesse, Alemayehu Seyoum, 2015. "Productivity and efficiency of smallholder teff farmers in Ethiopia:," ESSP working papers 79, International Food Policy Research Institute (IFPRI).
    4. Krishnan, Pramila & Patnam, Manasa, 2013. "Neighbours and Extension Agents in Ethiopia: Who matters more for technology diffusion?," CEPR Discussion Papers 9539, C.E.P.R. Discussion Papers.
    5. Baldos, Uris Lantz C. & Hertel, Thomas W., 2012. "Economics of global yield gaps: A spatial analysis," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124978, Agricultural and Applied Economics Association.
    6. Alexander Jordan & Marco Guerzoni, 2020. "The pain of a new idea: Do Late Bloomers response to Extension Service in Rural Ethiopia?," Papers 2006.02846, arXiv.org.
    7. Caria, A. Stefano & Tamru, Seneshaw & Bizuneh, Gera, 2011. "Food security without food transfers?: A CGE analysis for Ethiopia of the different food security impacts of fertilizer subsidies and locally sourced food transfers," IFPRI discussion papers 1106, International Food Policy Research Institute (IFPRI).
    8. Rudra Bahadur SHRESTHA & Wen-Chi HUANG & Shriniwas GAUTAM & Thomas Gordon JOHNSON, 2016. "Efficiency of small scale vegetable farms: policy implications for the rural poverty reduction in Nepal," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 62(4), pages 181-195.
    9. Caria, A. Stefano & Tamru, Seneshaw & Bizuneh, Gera, 2011. "Food security without food transfers?: A CGE analysis for Ethiopia of the different food security impacts of fertilizer subsidies and locally sourced food transfers," ESSP working papers 29, International Food Policy Research Institute (IFPRI).
    10. Muuz Hadush, 2017. "Implication of Animal Feed and Water Scarcity on Labor Allocation, Food Production and Per Capita Food Consumption in Tigrai Region, Ethiopia," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 42(4), pages 59-93, December.
    11. Bachewe, Fantu Nisrane & Koru, Bethlehem & Taffesse, Alemayehu Seyoum, 2015. "Cereal productivity and its drivers: The case of Ethiopia:," ESSP working papers 75, International Food Policy Research Institute (IFPRI).
    12. Shrestha, Rudra Bahadur & Huang, Wen- Chi & Pradhan, Upasana, 2017. "Evaluating The Technical Efficiency Of Smallholder Vegetable Farms In Diverse Agroecological Regions Of Nepal," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 5(1), January.

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