Sources of Profit Inefficiency for Faba Bean Producers in Ethiopia
DOI:
https://doi.org/10.54536/ajaset.v8i2.2610Keywords:
Efficiency, Ethiopia, Fababean, Profit, Stochastic Frontier Model, Transcendental Logarithmic FunctionAbstract
This study uses the profit frontier model to assess the profit efficiency and determinants of inefficiency using primary data collected from 334 fababean producers selected from the Amhara and Oromia regions of Ethiopia. The result confirmed that fababean production in Ethiopia is profitable as the profit efficiency score is 86.10%, indicating 14% profit inefficiency. This implies that the enhancement of all the inefficiencies will result in the achievement of the potential profit of 9,360.48 birr/ha. Sex, access to off-farm income, training on pulse production, participation in improved fababean seed production, and the total land owned by the household head were the determinant factors for profit inefficiency. This study suggests that the profit efficiency of fababean farmers will remarkably improve if vocational training is given to farmers, production is planned based on available resources to the farmers, appropriate prices are available for their produce, and households get access to off-farm incomes.
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