Economic Efficiency of Wheat Producers: The Case of Debra Libanos District, Oromia, Ethiopia

Abstract

Ethiopia has enormous potential for wheat production, yet it remains a net wheat importer. This paper aims to examine the efficiency of wheat production in Debra Libanos district, Ethiopia. Two stages sampling technique was used to randomly select 150 farmers for the study. A stochastic production frontier and two-limit Tobit estimator was utilized in the study. The study reveals that technical (78.5 %,), allocative (85.6%), and economic (66.7%) efficiencies. The yield gap was 5.13 quintal/ hectare showing a room to increase efficiencies. The study identified the determinants of wheat production efficiency in the area. Hence, to improve wheat production efficiencies strengthen extension services, improved technology utilization, and proper land ploughing. Besides, natural resource conservations that improve soil fertility should be the focus of the policymakers.