Technical efficiency of smallholder farmers in red pepper production in North Gondar zone Amhara regional state, Ethiopia

Indtroduction: Currently, Ethiopia is following an agricultural development-led industrialization strategy with a major goal of helping agriculture grow so that it can encourage growth in other sectors of the country’s economy. However, it is characterized by low productivity due to technical and socioeconomic factors. To improve this problem, integration of modern technologies with improved level of efciency becomes more crucial. Therefore, this study tries to fll the gap by investigating efciency variations and factors afecting technical efciency of red pepper production in North Gondar zone Amhara regional state, Ethiopia. Methods: By using multistage sampling, cross-sectional data were collected from 385 systematically selected households. Stochastic frontier Cobb–Douglas production was estimated. Result and conclusion: The results of the analysis revealed that a mean technical efciency of red pepper was 78.80% (ranging from 16 to 94.9%). This implies that red pepper producers can reduce current level of input application by 21.2% given the existing technology level. The estimated stochastic production frontier (SPF) model also indicates that land, seed, chemical, oxen and labor are signifcant determinants of red pepper production level. The estimated SPF model together with the inefciency parameters shows that age, education status, land size, land fragmentation, extension service, credit access and market information were found to statistically and signifcantly afect the level of TE of red pepper farmers in the study area. Hence, emphasis should be given to improve the efciency level of those less efcient farmers by adopting the practices of relatively efcient farmers in the area so that they can be able to operate at the frontier. Specifcally the concerned body should provide adult and vocational education for the farmers and create opportunities for farmers with lower technical efciency to have experience and best practices sharing with those that scored efciency scores close to one.