IJAIR NAAS Score : 3.99 ,ISSN : 2319-1473

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Sources of Technical Inefficiency of Smallholder Cow Milk Producers in Yabelo District of Oromia Region, Ethiopia

Belay Biru; Degye Goshu
This study investigates source of technical inefficiency of smallholder cow milk producers using tobit regression after identification of inefficiency level using stochastic production approach of Cobb-Douglas production form. The data collected from 177 sample household randomly selected from pastoral and agropastoral Kebeles of Yabelo district. The result indicated producers producing on average 28.56% below their potential produThis study investigates source of technical inefficiency of smallholder cow milk producers using tobit regression after identification of inefficiency level using stochastic production approach of Cobb-Douglas production form. The data collected from 177 sample household randomly selected from pastoral and agropastoral Kebeles of Yabelo district. The result indicated producers producing on average 28.56% below their potential production level. This means if producers are producing in fully efficient way, they can save on average of their current input to produce their current output or increase their current milk output by 28.56% without additional inputs requirement. The gamma parameter, ℽ, was found to be 0.70 showing 70% of the deviation of actual output from potential output was due to technical inefficiency. The result of Tobit regression model shows that family size, size of livestock holding, extension contact, distance to veterinary clinic, distance to water positively and significantly contributed to inefficiency while age and education level of household head negatively and significantly affecting inefficiency of milk producers. Evidently intervention on access to water source, veterinary clinic, education, family planning and productivity oriented livestock holding will improve technical efficiency of cow milk producer of the study area.ction level. This means if producers are producing in fully efficient way, they can save on average of their current input to produce their current output or increase their current milk output by 28.56% without additional inputs requirement. The gamma parameter, ℽ, was found to be 0.70 showing 70% of the deviation of actual output from potential output was due to technical inefficiency. The result of Tobit regression model shows that family size, size of livestock holding, extension contact, distance to veterinary clinic, distance to water positively and significantly contributed to inefficiency while age and education level of household head negatively and significantly affecting inefficiency of milk producers. Evidently intervention on access to water source, veterinary clinic, education, family planning and productivity oriented livestock holding will improve technical efficiency of cow milk producer of the study area.
Select Volume / Issue:
Year:
2020
Type of Publication:
Article
Keywords:
Technical Inefficiency; Tobit Regression; Yabello District
Journal:
IJAIR
Volume:
9
Number:
1
Pages:
31-39
Month:
July
ISSN:
2319-1473
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