Academic Research Journal of Agricultural Science and Research
 

Academic Research Journal of Agricultural Science and Research 

Vol. 6(6), pp. 336-342. July, 2018.

ISSN: 2360-7874 

 DOI: 10.14662/ARJASRD2018.040

Full Length Research

Economies of Scale and Cost Efficiency of Maize Production in  Meskan Woreda of Gurage Zone.

Muluken Philipos^*

Ethiopian Institute of Agricultural Research, Agricultural Economics Research Directory.

P. O. Box 2003, Addis Ababa. *Corresponding Author’s E-mail: mulphinat@yahoo.com; telephone: +251911977934

Accepted 29 July 2018

The study examined empirically the current levels of efficiency of some selected maize Farmers in the Meskan Woreda using cross section data from 150 by employing multistage sampling technique. Cobb-Douglass stochastic cost frontier model was used to predict farm level efficiency using Maximum Likelihood Method for the allocative efficiency. The study revealed that cost inefficiency in the maize production system exists. The allocative efficiency indices indicated that, the mean efficiency was 1.13 of the sampled households of this study. Accordingly, the study discovered that, Seed used, age, Education and method of production were positively related to allocative efficiency and significant at 1%, 5%, 1%, and 5% respectively. Hired labour, Extension contact and Proximity to market were negatively related to allocative efficiency and significant at 1%. There was no significant relationship between allocative efficiency and sex, family size, maize farming experience, Off-farm income, and credit access. Results of the stochastic frontier cost function showed that variance parameters gamma (γ) and sigma (δ²) are both significant at 1% level. Therefore, it is recommended that government should do the intensive on-farm training since farmers mainly depend on trial and error, if possible and the advantage of using optimum utilization of inputs with respect to its cost incurred for the production of maize. Moreover, farmers need to focus on related to factors of Seed used, age, Education and method of production in order to get more opportunity that enables creating an opportunity for the improvement of allocative efficiency by the maize farmers.

Keywords: Economics of scale, stochastic frontier cost function, Cost efficiency.

How to cite this article: Muluken Philipos (2018). Economies of Scale and Cost Efficiency of Maize Production in Meskan Woreda of Gurage Zone. Acad. Res. J. Agri. Sci. Res. 6(6): 336-342

FULL TEXT [PDF]