Resource allocation in traditional agriculture in the Ethiopian highlands : a case study
Date
1985
Authors
Woldekidan, Berhanu
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Abstract
This study examines the technical efficiency of the semisubsistence
farmers of Ethiopian highlands at Basona-Warana subdistrict.
It also looks at their allocative efficiency in the way that
they equate marginal value products of inputs with the respective
prices "on the average" in allocating the resources at their disposal.
Prior to examining the technical and allocative efficiencies, an
overview of the study area is presented. this is followed by a
theoretical and empirical literature review on technical and allocative
efficiency with particular reference to less developed countries.
The study applies a complex, carefully specified, modified
transcendental production function of log-semi-log (L-S-L) form to the
time-series cross-sectional data to estimate the input-output
relationship of the three major crops grown in the area.
The results obtained from this study do not provide evidence of
inefficient allocation of resources, on the average. Accordingly,
output can hardly be raised by reallocating the existing resources.
The measure of technical efficiency indicates that only small
proportion of the farmers are significantly different from the average
farm. However, the magnitude of the technical efficiency differential
between the best performing, the average and poorly performing
farmer(s) is quite substantial. Hence there is some scope to raise
production by improving the technical efficiency of the average and
weak farmers.
To this end both the included observable explanatory variables as
well as some excluded factors which are significantly related to
technical efficiency were identified. The results obtained suggest that
a significant relationship exists between technical efficiency and the
included variables of land under wheat and horsebeans, the relationship
being negative with the former and positive with the latter. Similar
tests with excluded factors of farm asset holdings and number of plots revealed that farm assets are significantly related to technical
efficiency in barley and horsebeans and that number of plots under
barley has a negative impact on technical efficiency in barley
production. Similar technical efficiency rankings of the farmers were
observed in the three different crops. There was also a marked shift in
productivity between the two years analysed.
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