Analysis of Technical Efficiency of maize production on small holder farmer. In the case of Boneya Boshe woreda.@ Jimma University

1. Produced by: Gemechu Bari
Main Advisor. Dr.Esubalew
(PhD) .
Co-Advisor. Mr. Gudina Tolosa.
(M.Sc.).
Examiners: Dr.Leta Sera (PhD).
April,2023
Jimma, Ethiopia
Proposal Presentation on Analysis
of Technical Efficiency of Maize
production on Smallholder
Farmer. in case of Boneya Boshe
woreda
JIMMA UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS

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Outline
Outline of the presentation
Background and justification of the study
Statement of the problem
Research Questions
Objectives of the Study
Significance and scope of the study
Review of Related Literature
Methodology of the study
Budget and Work plan of the study

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Introduction
Background and justification of Study
The agricultural sector plays a crucial role in Sub-Saharan
Africa and dominant aspect of the Ethiopian economy with
high share 46% of GDP,
73% of employment creation and
nearly 80% of foreign export earnings (FAO,
2020).
Ethiopia is an agrarian country where a large majority of
people are poor living in rural areas, who deriving their
livelihood from this agriculture.

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Contin………
 There is high population day to day but low productivity
has happen due to :-
 Land is fixed
 Technical inefficiency factors like weather
 a lack of technology transfer, and
 decreasing availability of arable land
are the major contributors to the current food shortage
and food insecurity in Ethiopia. (Diogo M etal, 2022).

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 Ethiopia has adopted agricultural development-led
industrialization as long term a national strategy to
promote and sustain smallholder farmer agriculture
since 1990.
 Based on the end performance report from GTP I and
GTP II, country has grown from one step forward which
emphasis on poverty alleviation. (NPC, 2015).

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Contin…….
 Currently, After Prime Minister Abiy Ahmed came to
power in 2018,
 Government has designed and implemented a long-
term strategic plan for home-grown economic policies.
 Which aims at the agricultural sector contributes
significantly to poverty alleviation, GDP, and our
country's development.(FDRE Plan and Development
Commission, 2021).

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Contin…….
The aims of Home grown economic policy will expected to
boost agriculture.
Increase agricultural output and productivity.
Increase output –oriented approach.
Increase industrial output and productivity.
Close input-output linkage between the two sectors.
-Food
-Supply Raw materials
Farm Machinery, fertilizer, other agri.inputs
Agriculture
(Rural)
Industry
(Urban)

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Maize (Zea mays) is one of the major food crops
produced by smallholder farmers in Ethiopia.
Cereal crops contributed 88.36% (about 302 million
quintals) to Ethiopia's grain production in the 2020/21
Meher season.(CSA, 2021).
From this maize has covered in Ethiopia by 34.95%
(105.6 million quintals).
In Oromia region, It covered 5.9 million ha and total
production of 169.6 million Quintals. (CSA, 2021).
Contin…….

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Maize is an essential crop in the eastern Wollega
zone of the Oromia region.
Farmers mainly grow maize for market and for
consume grain as an additional diet.
In general, there are potential maize producers in the
Oromia region of Boneya Boshe woreda.
But there is lack of relevant study conducted on TE of
maize production in the study area.
Contin…….

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Due to this reason, Production and productivity can be
basically boosted in two ways:-
1) Through increased use of inputs or improvements in
technology, given some level of input.
2) Improving productivity to enhance the efficiency of
smallholder farmers, given a fixed level of inputs and
technology.
I will select option 2 for this study in order
understand further research.
Contin…….

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Agricultural output of developing countries is
characterized by low productivity which is more difficult
to attain food security and food self-sufficiency (FAO,
2022).
Increasing population size and low level of agricultural
production have a critical problem in sub-Saharan
African countries especially Ethiopia, (FAO, 2022).
Current estimates suggest that 25% of maize production
is threatened by frequent drought and hunger especially
in Oromia region like smallholder farmer Borena people.
Statement of the problem

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According to Salam, 2020. efficient input markets are
also crucially important in order to
deliver the right product,
at the right time,
in the right amounts,
at a convenient place, and
for an affordable price
but not delivered on time of agricultural inputs like Fertilizer,
seeds, chemicals for smallholder farmers it leads to technical
inefficiency of maize productivity.(Salam, etal 2020).
Cont……

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According to Aschalew 2020, conducted on technical efficiency of
maize production in Adola Rede and Anna Sorra Woreda of Guji
zone by considering,
 Gender of household,
 Age of household, farm income, credit access,
 row planting, seed and land size owned and livestock
ownership as the main determinant of farmer technical
inefficiency by using maximum likelihood method.
(Aschalew, 2020).
Nevertheless, social development is dynamic their study is
restricted to only one zone /region not represents other
zone/region.
Conti…….

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 Although Different author’s conducted on determinant
of technical efficiency of maize production at different
part of Ethiopia by considering with limited variables
such as
 farm income, credit access, Age,
 livestock ownership, land ownership and
proxy variables.
the main significant variable affect technical efficiency of
maize by using Tobit model and stochastic frontier
model.(Minilik, etal, 2022,Tolesa, 2018 and Yimenu, 2017).
Conti…..

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 While, this finding is inconsistent and inappropriate
interpretation due to lack of knowledge and
professional deviate from research findings or not
covered by research objectives.
 previous study conducted there is knowledge and
information gaps that given result and also missed
important explanatory variable.
 There is also population gaps, way of used
methodology and area specific evidence.
Cont...

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 Due to this researcher will interest and inspire to
conduct and fulfill in the prevailing information and
knowledge gap on analysis of technical efficiency of
maize production in Boneya Boshe Woreda including
missed explanatory variable such as
 Fertilizer (NPS + Urea),Extension service agent,
 chemicals (Herbicide + pesticide)
 Mkt distance from plot maize, land fragmentation,
 labour, soil fertility, land ownership and,
 organic fertilizer like compost, cattle manure,
Cont….

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 What is the level of smallholder farmers' technical efficiency
in the production of maize in the study area?
 What are the determinants of technical efficiency of maize
producer among the smallholder farmers in the study area?
 What are the major sources of technical inefficiency and
differential of maize production among the smallholder
farmers in the study area?
 What are the yield gaps of maize producers among
smallholder farmers in the study area?
Research Question

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1.General objective of the study
 The general objectives of the study will analysis the technical efficiency
of maize production on smallholder farmers in East Wollega zone in case
of Boneya Boshe Woreda.
2.Specific Objective the study
To analysis the level of smallholder farmers' technical efficiency in the
production of maize in the study area.
To identify and analyze the determinants of technical efficiency among
the maize producer in study area.
To assess the yield gap of maize producers among smallholder farmers
in the study area
To identify the major source of technical inefficiencies and differential
in maize production among Smallholder farmers in the study area.
Objective of the Study

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 The study will be important for farmers to know the efficiency
of maize productivity and create a fair and efficient allocation
of inputs.
 The study will be necessary for the local government to know
the technical efficiency and determinants of maize production
among smallholder farmers.
 The study will be used as a source by other researchers
conducting research in the area.
 Scope of the study will be implemented in East Wollega
zone of Oromia region, Ethiopia at Boneya Boshe Woreda.
 The Woreda will be beneficiaries from this study in order to
develop program intervention for smallholder farmers to
enhance the efficiency and productivity of maize.
Significance and Scope of the study

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1.Concept ofTechnical Efficiency
As many Authors’ stated, Productivity and efficiency are
used interchangeably, but both of them are not the same.
 Simply, productivity is the amount of a given output of a
firm per unit of input.
 productivity as how much output is produced by one
unit of input for task is performed,...Quantity while
efficiency has how well the resources are utilized and
with limited resources at minimum cost.-------Quality
Literature Review

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Technical efficiency refers to a firm's or smallholder farmers
ability to produce output with a given level of inputs, given the
level of technology available. while
Technical inefficiency refers to the possibility of production
functions occurring within the set of production possibilities curve.
Allocative efficiency is the ability of a firm to use the inputs in
optimal proportions, given their respective prices.
Economic efficiency combines both technical and allocative
efficiencies.
Contin………

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1).Output-oriented method, is by how much output will
increase from a given level of inputs.
It focus on the changes in output of a firm that may be achieved
when using the same quantity of inputs
2).Input-oriented method is the minimum amount of input
required to produce a given amount of output.
The amount by which all inputs will be proportionally reduced to
achieve an efficient level of production.
Both measures will coincide when the technology exhibits
constant returns to scale, but likely to vary otherwise.
Method of Technical Efficiency Measures

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Other technique to estimate the technical of efficiency are
1.None-Parametric method- it known as data envelopment analysis,
 Estimation are based on linear programming and consists of
estimating a production frontier through a convex envelope curve
formed by line segments joining observed efficient production
units.
 Based on the argument, I also criticized this method .
I. It cannot test for the best specification;
II. It does not take measurement errors and random effects into
account;
Contin………

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III. The number of efficient firms on the frontier tends to increase
with the number of inputs and output variables and
IV. results are sensitive to the selection of inputs and outputs
2.Parametric Method.
 This can produce a stochastic frontier production function.
 It enables us to test for the best specification and take
measurement errors and random effects into account
during the estimation of the efficiency level of the firm.
It depend on econometric estimation procedure, two types are-
Deterministic and stochastic production frontier model.
Contin………

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Conceptual Framework
Smallholder farmer
characteristics
Level of education
Sex and Age
Family size
Marital status
Environmental Factors
Pest and disease
Soil fertility
Plot slope
Climate change
Technical Efficiency
of Maize Production
Institutional Factors
Credit access
Extension
Service
Market distance
Improved seed
Chemicals
(Herbicide and
Pesticide)
Farm characteristic
Cultivated land
Land ownership
Land
fragmentation
Slope of land
Expected Outputs
Higher output and income
generate
Poverty reduction and food
security
For Policy brief and gov’t
intervention
Sustainability of farming and
competitiveness

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Research Design:-
 The study will use cross sectional sample survey design.
 The cross-sectional survey design will be used for its advantage
of measuring current attitudes or situation.
 It provides short period of time in maize production.
Target of population. The target of population will focus on
Boneya Boshe woreda of smallholder farmer in maize
producer.
Sample size and Sampling techniques. Researcher will be
used probability sampling method.
Methodology of the study

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Due to the potential of maize production and its extent in the
area, Boneya Boshe woreda will be selected purposively.
A two stage random sampling technique will be employed to
select sample households for this study.
In first stage out of 10 Kebele exist in the woreda three
Kebele will be selected randomly namely Gala Guree, Boshe
Timbako, and Ejersa Gutee.
In second stage 154 samples household will be selected by simple
random sampling procedure from three Kebele considering that
account probability proportional to the size of maize producers in
each sample Kebele.
Cont…

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 The study will apply Yamane, (1969), formula to determine the
required sample size at 95% confidence level, degree of variability
0.05 and sampling error at 8% = 0.08
 n = N/(1+N(e)2)
 Where ‘n’ is the required sample size, ‘N’ is total number of
smallholder farmers in the selected Kebele (9865) and ‘e’ is
sampling error (0.08).
 because agriculture is by nature it depend on climate situation and
to minimize the bias of the data.
 Total of 154 smallholder farmer will be selected from three
kebeles.
Cont…

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 Data will be collected in quantitative and qualitative form from
both primary and secondary sources.
 In relation to this, the researcher will be deployed primary data
gathered using mechanism of:-
face to face interview,
structured survey questionnaire and
observation method from maize dominant
farmers
Secondary data source such as Journal articles, CSA report,
published books and Boneya Boshe agricultural office report.
Data type, Source and method of data collection

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 Descriptive statistics and Econometric models will be used for
data analysis.
 Descriptive statistics like minimum, maximum, mean, standard
deviations, and frequencies will describe the farm characteristics of
the households of the technical efficiency of the smallholder maize
producer.
 Econometric analysis will be used to estimate farmers' technical
efficiency using the stochastic frontier model with the help of
maximum likelihood estimation method.
Method of data analysis

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Stochastic production frontier model
Econometric model using the Cobb-Douglas stochastic
production frontier model will be applied.
The model will estimate the parameters of production
frontier, efficiency level and significant level of the different
variables in determining farmers' inefficiency.
 The frontier half normal and truncated normal stochastic
models will be used to measure the magnitudes and
determinants of inefficiency in maize production.
Model Specification

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 Ordinary least squares (OLS) regression production
functions:
fit a function through the centre of the data
assumes all firms are efficient
 Deterministic production frontiers:
fit a frontier function over the data
assumes there is no data noise
 SFA production frontiers are a “mix” of these two
When matimatically shown as below equation.
Contin………

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Contin………

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A log-linear functional form of Cobb-Douglas production function
will be used for this study with the help of STATA version 15.
Ln (Yi) = β 0+ β 1ln LAND + β 2 ln NPS+β3ln UREA+β4 ln
OXEN POWER+β5ln LABOR+β6 lnSEED +β7 ln Herbicide + v i-
u i.
The technical efficiency model in which both the stochastic
frontier and factors affecting inefficiency (inefficiency effect model)
are estimated simultaneously. (Coelli and Battese (1996) .
Model Specification

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By using joint estimation of a stochastic frontier and
production function.
Ln (Yi) =β0+β1 ln LAND+ β2 ln NPS +β3 ln UREA+β4 ln
OXEN +β5 ln LABOR+β6 ln SEED+β7 ln
PESTICIDE/HERBCIDE + v i - (δ0+δ1 AGe +δ2 IMP
SEED+δ3 EXTENSION +δ4 SLOPE +δ5 EDU+δ6
FMSIZE+δ7 CRDT+ δ8FRM SIZE+δ9TLU+δ10 LAND
OWNERSHIP+ δ11OFF-FARM+δ12FRGM LAND +ℰi).
Model Specification

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Increasing maize yield and reducing the yield gap are
essential to ensure future food security in Ethiopia.
potential output and the yield gap will be estimated as:-
 TEi = Yi/(Yi*) =(f (Xi,β) exp (vi-μi))/(f (Xi,β) exp (vi))=exp(-μi)
 Y* =Yi/TEi = f (Xi, β) exp (vi)
 Ygapi=Y*-Yi
Y* = The potential output of the ith smallholder farmer in
maize production,
Y = The actual/observed output of the ith smallholder farmer
in maize production.
Model Specification

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After the end of research, we will expect from outputs
are:-
High output and income generate for smallholder
farmer will be value-added.
Poverty reduction and food security will be
improved.
For policy brief and gov’t intervention will be
upgraded.
Sustainability of farming and competitiveness will
be developed.
Expected Output/Results

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Work plan of Research Activities
N/S Activities
Months
Jan Feb Mar Apr May June
1 Literature review and proposal writing X
2 Development of questionnaire & interview guide X
3 Photocopying study materials X
4 Move to study sites X
5 Preparation of respondents X
6 Collecting data X
7 Organizing and categorizing data X
8 Data editing and enter to computer X
9 Data analysis X
10 Writing first draft of the research paper X
11 Writing the final draft of the research paper X
12 Submission of the research X
13 Final paper Presentation X

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Budget Requirement for Research Activities
S/N Item Indicators Quantity
Unit
price Total
Cost
(Birr)
1 Paper Packs 3 600 1,800.00
2 Pen(blue) Put 10 50 500.00
3 Pen(red) Put 10 50 500.00
4 Pencil Put 10 30 300.00
5 Flash disk Number 32GB 500 500.00
6 Training Data collectors 10 400 4,000.00
7 Data collection 10 data collectors for 10 days 10 500 5,000.00
8 Data Entering 154 survey Questionnaire 10 days 500 5,000.00
9 Questionnaire 8 page of 154 1232 10 12,320.00
10 Transport cost Researcher 10 days 1000 10,000.00
11 Perdiem for researcher 10 Development agent expert 10 400 4,000.00
12 Draft proposal Print Draft data 90 pages 10 900.00
13 Final Proposal Print Final data 90 pages 10 900.00
14 Draft Report Printing Draft papers 90 pages 10 900.00
15 Final Report Printing Final papers 95 pages 10 950.00
Sub total 47,570.00
Contingency 10% 4,757.00
Grant Total 52,327.00

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