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The study aimed to analyze the economic efficiency of sesame production in west Armachiho
and to identify major factors that cause efficiency differentials of sesame farmers. The study
was conducted using a cross sectional data collected in 2017 production year from a total
sample of 301 households. Cobb-Douglas production function was employed to estimate
economic efficiency of farmers in sesame production whereas the Tobit model was used to
identify factor affecting efficiency levels of the sample farmers. The finding of the study
indicated that there is inefficiency in the production of sesame in the study area. The
estimation of the stochastic frontier models shows that the mean technical, allocative and
economic efficiency of farmers were 0.772(77.2%), 0.887(88.7%) and 0.684(68.4%)
respectively. Results of the Tobit model revealed that age and education (secondary) affect
technical inefficiency negatively and significantly, while marital status (divorced and
widowed) affect technical inefficiency positively. The result also indicated that household
size and education status(tertiary) have negative and significant effect on allocative
inefficiency The result of the study also shows that age, education status (secondary) and
extension visit affect has a negative and significant effect on economic inefficiency whereas
marital status (divorced and widowed) and farming experience affect economic inefficiency
positively and significantly. A key government intervention in this regard might be capacity
building of sesame cooperative societies so that they may fulfill their mandate of providing
inputs at the lowest costs as expected due to collective purchase. |
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