A Comparative Stochastic Frontier Analysis of Irrigated and Rain-Fed Potato Farms in Eastern Ethiopia
Abstract
Irrigation development has been considered as one of the viable strategies for achieving food security. Accordingly, the government of Ethiopia has been increasing water resource development and utilization. However, to what extent the irrigation users are better off than rainfall dependent counterparts on their technical efficiency (TE) and variability in productivity among the farmers is not well known. Therefore, this study compared the technical efficiency of farmers who are producing potato under irrigation and through rainfall in Eastern Ethiopia. Propensity Score Matching was applied to select irrigated farms with comparable attributes to rain-fed farms to see the true efficiency differences between the two groups. Cobb-Douglas production function was fitted using the stochastic production frontier for both irrigated and rainfed farming. The result indicated that irrigated farms have high ineffi ciencies compared with the rain-fed farms. This indicates the existence of considerable potential for increasing output by improving the efficiency of irrigated farms than rain-fed farms. Among the factors hypothesized to determine the level of TE, landholding, family size and extension contact were found to have a signifi cant eff ect on irrigated farms whereas, landholding, non/off income, farm income, livestock size and extension contact were the determinants in rain-fed farms. This indicates that factors that affect technical efficiency in irrigated farms are not necessarily the same as rain fed farms. Therefore, it is important to consider both farms groups in evaluating strategies aimed at improving technical effi ciency of smallholder farmers.
Keywords
Propensity Score Matching; Potatoes; Arable farm; Stochastic analysis; Effectiveness; Efficiency in agriculture; Stochastic Frontier Analysis (SFA)
References
Ahmed, H., Lemma, Z., Endrias, G. (2014). Technical Efficiency of Maize Producing Farmers in Arsi Negelle, Central Rift Valley of Ethiopia: Stochastic Frontier
Approach. J. Agric. Forest., 60 (1), 157-167.
Aigner, D., Lovell, C., Schmidt, P. (1977). Formulation and Estimation of Stochastic Frontier Production Function Models. J. Economet., 6, 21-37.
Arega, D., Manfrez, Z. (2005). Technology Adoption and Farmer Efficiency in Multiple Crops Production in Eastern Ethiopia: A Comparison of Parametric and Non-Parametric Distance Functions. Agric. Econ. Rev., 6(1), 5-17.
Awulachew, B., Yilma, A., Loulseged, M., Loiskandl, W., Ayana, M., Alamirew, T. (2007). Water Resources and Irrigation Development in Ethiopia. Working Paper 123. Colombo, Sri Lanka: International Water Management Institute.
Battese, G. E., Coelli, T. J. (1995). A Model for Technical Inefficiency Eff ects in a Stochastic Frontier Production Function for Panel Data. J. Empiric. Econ., 20 (2), 325-332.
Bezabih, E., Hadera, G. (2007). Constraints and Opportunities of Horticulture Production and Marketing in Eastern Ethiopia. Dry lands Coordination Group Report No. 46.
Rosembaum, P. R., Rubin, D. B. (1983). The central role of the propensity score in observational studies for causal effects. Biometrika, 70(1), 41-55.
Bradley, K., Tatjana, H., Ralph, M., Charles, E., Wilson, J., Lance, S. (2014). Measurement of Technical, Allocative, Economic, and Scale Effi ciency of Rice Production in Arkansas Using Data Envelopment Analysis. J. Agric. Appl. Econ., 46(1), 89-106.
Caliendo, M., Kopeinig, S. (2008). Some Practical Guidance for the Implementation of Propensity Score Matching. IZA Discussion Paper No. 1588, University of Cologne.
Chakraborty, K., Misra, S., Johnson, P. (2002). Cotton Farmers' Technical Effi ciency Stochastic and Non-Stochastic Production Function Approaches. Agric. Res. Econ. Rev., 31, 211-220.
Charnes, A., Rhodes, E. (1978). Measuring the Inefficiency of Decision Making Unit. Eur. J. Oper. Res., 2, 429-44.
CSA (2014). Statistical Report on Area and Crop Production. Addis Ababa, Ethiopia: Central Statistical Agency.
Coelli, T. J., Prasada, D. S., O'Donnell, C. J, Battese, G. E. (2005). An introduction to efficiency and productivity analysis. Second edition. New York: Springer Science.
Coelli, T. J., Prasada, D. S., O'Donnell, C. J., Battese, G. E. (1998). An Introduction to Efficiency and Productivity Analysis. Boston: Kluwer Academic Publishers.
Coelli, T. J. (1995). Estimators and Hypothesis Tests for Stochastic Frontier Function: A Monte Carlo Analysis. J. Prod. Anal., 6, 247 - 268.
Dehejia, R. H., Wahba, S. (2002). Propensity Score Matching Methods for Non-Experimental Causal Studies. Rev. Econ. Stat., 84 (1), 151-161.
Del Gatto, M., Di Liberto, A., Petraglia, C. (2011). Measuring Productivity. Econ. Surv., 25 (5), 952-1008.
Endale, G., Gebremedhin, W., Lemaga, B. (2008). Potato Seed Management. In: W. Gebremedhin, G. Endale, B. Lemaga (Eds.), Root and tuber crops: The untapped resources (p. 53-78). Addis Ababa: Ethiopian Institute of Agricultural Research.
FAOSTAT (2015). Retrieved from: http://faostat3.fao.org/ home/E.
FAO (2009). How to Feed the World In 2050, Vialedelle Terme di Caracalla. Rome, Italy: Food and Agriculture Organization of the United Nations.
Farrell, M. J., Fieldhouse, M. (1962). Estimating Efficient Production under Increasing Returns to Scale. J. Royal Stat. Soc., 125, 252-267.
Farrell, M. J. (1957). The Measurement of Productive Efficiency. J. Royal Stat. Soc., 120, 253-281.
Gebrehaweria, G., Regassa, N., Stein, H. (2012). Technical Efficiency of Irrigated and Rain-Fed Smallholder Agriculture in Tigray, Ethiopia: A Comparative Stochastic Frontier Production Function Analysis. Q. J. Int. Agric., 51(3), 203-226.
Gelaw, F. (2013). Inefficiency and Incapability Gaps as Causes of Poverty: A Poverty Line-Augmented Efficiency Analysis Using Stochastic Distance Function. Afr. J. Agric. and Res. Econ., 8 (2), 24-68.
Getachew, S., Ranjan, R. (2012). Growing Vulnerability: Population Pressure, Food Insecurity and Environmental Degradation, Central Rift Valley, Ethiopia. J. Biodiv. Env. Sci., 2(3), 33-41
Goshu, D., Kassa, B., Mengistu, K. (2012). Is Food Security Enhanced By Agricultural Technologies In Rural Ethiopia? Afr. J. Agric. Res. Econ., 8 (1), 58-68.
IWMI (2011). A Comparative Analysis of the Technical Effi - ciency of Rain-Fed and Smallholder Irrigation in Ethiopia. International Water Management Institute.
Jondrow, J., Lovell, C. K., Materov, I. S., Schmidt, P. (1982). On Estimation of Technical Ineffi ciency in the Stochastic Frontier Production Function Model. J. Economet., 19, 233-38.
Mahlet, A., Bezabih, E, Mengistu, K., Jeffreyson, K. M., Jemal, Y. (2105). Gender role in market supply of potato in Eastern Hararghe Zone, Ethiopia. Afr. J. Agric. Mark., 3 (8), 241-251.
Meeusen, W., Van Den Broeck, J. (1977). Efficiency Estimation from Cobb-Douglas Production Function with Composed Error. Int. Econ. Rev., 18, 435-444.
MoA (2000). Agro-ecological zonations of Ethiopia. Addis Ababa, Ethiopia: Ministry of Agriculture.
Raymond, J. (1981). The Measurement of Technical Efficiency: The Reconsideration. J. Econ., 96(3).
Sharma, K. R., Leung, P., Zalleski, H. M. (1999). The Technical, Allocative and Economic Effi ciencies in Swine Production in Hawaii: A Comparison of Parametric and NonParametric Approaches. Agric. Econ., 20, 23-35.
UNDP (2009). Terms of Reference for Consultancy to Carry out Assessment of Past and Present Experiences (Success/ Challenges) On the Resettlement Program in Tigray Region. United Nation Development Program.
WFP (2010). The State of Food Insecurity in the World. Rome, Italy: World Food Program.
Yin, R. (2000). Alternative Measurements of Productive Efficiency in the Global Bleached Softwood Pulp Sector. J. Forest Sci., 46, 558-569.
Haramaya University Ethiopia
Haramaya University Ethiopia
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
This journal permits and encourages authors to post items submitted to the journal on personal websites or institutional repositories both prior to and after publication, while providing bibliographic details that credit, if applicable, its publication in this journal.