Analysis of potato production efficiency among smallholder farmers in Awi Zone, Amhara region, Ethiopia

Abstract

In the Awi Zone of Ethiopia, potato is a vital staple and cash crop, crucial to the food security and livelihood of smallholder farmers. Despite its significance, productivity remains low and constrained by inefficiencies in resource use. Therefore, this study aimed to analyze the technical, allocative, and economic efficiency of potato production in Awi Zone, Amhara Regional State, Ethiopia. A multi-stage sampling technique was used to randomly select 480 sample households. The study used descriptive statistics and econometric models for the analysis. A stochastic frontier model was applied to estimate production efficiency, while a two-limit Tobit model was used to analyze the determinants of inefficiency. The result from the stochastic frontier model revealed that the mean technical, allocative, and economic efficiency of 68%, 65%, and 55%, implies potential efficiency gains of 32%, 35%, and 45%, respectively. The maximum likelihood estimate result revealed that oxen-days, education level, seed, and labor have a positive influence on potato production. The study revealed that education level, family size, and off-farm income negatively affects potato production technical inefficiency, while age of household head and farm size positively affect inefficiency. The finding revealed that farm size, credit access, and livestock holding negatively affect potato economic inefficiency. Therefore, the findings underscore the need for the adoption of labor-saving technologies, farmer education, off-farm income support, and input financing to enhance potato production efficiency.