Technical Efficiency of Irrigated Onion and Tomato Production in the Central Rift Valley of Ethiopia

Abstract

We estimated the technical efficiency of smallholder vegetable (onion and tomato) producers in the Central Rift valley of Ethiopia using a stochastic production frontier model. A multi-stage sampling procedure was employed to select 258 smallholder farmers producing onion (183) and tomato (75) in the 2018/19 growing season. The stochastic production frontier model was used to estimate the production frontier and identify the determinants of technical efficiency and technical efficiency levels of farmers. The results show that the technical efficiency of smallholder farmers in the area was about 73.4% and 59% for onion and tomato, respectively, showing 26.6% and 41% inefficiency levels in the same order. This result shows that there is a room to increase the yield of onion and tomato using existing technologies. Labor, fertilizer, agrochemicals, farm size, and cost of seeds/seedlings were the major factors that influenced changes in onion and tomato output. Education level of the household head, farming experiences, extension contact, off-farm income, and ownership of irrigation facilities have shown significant and positive impacts on the level of efficiency. We recommended that tomato growers should use pesticides with appropriate doses. More prominently, efficient resource use (e.g., labor, fertilizer, land, and seed), cost reduction, and profit maximization goals should be promoted so that farmers can benefit from the enhanced efficiency of onion and tomato production.