Analyzing the efficiency of potato production in Southern Ethiopia: a stochastic frontier analysis approach

Ethiopia's potato production potential is considerable; productivity currently lags behind the African average. Accessing new technologies with limited financial capacity in developing countries is difficult. Thus, prioritizing efficiency optimization through actionable interventions proves the pragmatic path. The study newly contributes to the existing literature by elucidating technical, allocative and economic efficiency levels and sources of inefficiency among southern Ethiopian potato farmers. We used cross-sectional data from 162 potato farmers using multi-stage sampling techniques. Descriptive statistics, stochastic frontier modelling and Tobit econometric analysis revealed efficiency metrics and roots of inefficiency at farm levels. Stochastic frontier maximum likelihood estimation identified seed, labor and draft power as statistically influential inputs. Farmers displayed technical, allocative and economic efficiencies of 0.811, 0.82 and 0.673% respectively. Separate Tobit regressions correlating inefficiency scores to household head demographics, land size, extension exposure, household dimensions, livestock ownership, property rights and weed management indicated actionable advantage points. Findings imply the possibility of an 18.9% average per hectare output increase by addressing technical inefficiency drivers. Similarly, cost savings of 18% appear attainable. Economic inefficiency resolution could lower costs by 32.7% through optimal input combinations. To maximize returns, targeted interventions on livestock, bolstering rural education and skills training, facilitating loans and disseminating high-quality seeds through community-centric extension could uplift productivity in potato growing areas. Further, gender-mainstreaming activities are required in the area for more efficient production of potatoes.