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Journal of African Economies Advance Access originally published online on December 4, 2006
Journal of African Economies 2007 16(1):1-27; doi:10.1093/jae/ejl044
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© The author 2006. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org

Production Efficiency of Smallholders' Vegetable-dominated Mixed Farming System in Eastern Ethiopia: A Non-Parametric Approach

Jema Hajia,b,*

a Department of Economics, Swedish University of Agricultural Sciences (SLU), Uppsala, Sweden
b Department of Agricultural Economics, Haramaya University (HU), Ethiopia

* Correspondence should be addressed to Jema Haji, Department of Economics, Swedish University of Agricultural Sciences (SLU), P.O. Box 7013, Uppsala S-750 07, Sweden. E-mail: jemmahaji{at}yahoo.com

This study estimates technical, allocative and economic efficiencies and identifies their determinants in smallholders' vegetable-dominated mixed farming system of eastern Ethiopia. Technical, allocative and economic efficiencies were estimated by a non-parametric data envelopment analysis method. The mean technical, allocative and economic efficiencies were found to be 91, 60 and 56%, respectively. This indicates the existence of substantial allocative and economic inefficiencies of production in the study areas. An econometric analyses based on Tobit model indicate that asset, off/non-farm income, farm size, extension visits and family size were the significant determinants of technical efficiency, whereas asset, crop diversification, consumption expenditures and farm size have significant impact on allocative and economic efficiencies. This study also reveals that the cost excess owing to inefficiency in the sample is on average 44%, mainly as a result of allocative inefficiency, which is attributed to low asset ownership and farm size, high consumer spending, crop diversification and barriers to the flow of labour between farm and off/non-farm activities.

JEL classification: D24


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