Economic Efficiency of Onion Production in East Shewa Zone, Oromia Region, Ethiopia

Abstract

In an economy where resources are scarce and opportunities for new technologies are lacking, efficiency studies able to show the possibilities to raise productivity by improving efficiency of farms without increasing the resource base or developing new technology. This study investigated Economic Efficiency of Onion Production in East Shewa Zone, Oromia Region, Ethiopia. Both primary and secondary source of data were used. Semi- structured questionnaires were used to collect data from Lume, Bora and Dugda districts. Totally 94 respondents randomly selected from each districts based on sample size determination. A stochastic production frontier function was fitted to the sample households. Tobit model was applied to determine factors affecting economic efficiency of onion production. The result revealed that the mean Technical, Allocative and Economic efficiency of onion production was about and 67.60%, 98.99% and 66.91% respectively. The tobit model result revealed that Onion Technical and Economic efficiency were positively and significantly affected by Experience in Onion production, frequency of Extension contact and Non- and off income activities while land allocated for Onion production affect Technical and economic efficiency negatively and significantly. District office of Agriculture, stockholders and concerned bodies should focus on extension service regarding of full package of production, provision of technical support and farmers should practice different Non-and Off-fam activities to improve his/her income that contribute to the improvement in efficiency of Onion production in the study area.