| Abstract: | Ethiopian sugar cane production is unsatisfactory to uphold the country’s comparative
advantage. Thus, this study was conducted to examine possible reasons
for low productive performance of sugar cane production by using cross sectional
data gathered from Wonji/Shoa Estate Farm and analyzing its technical efficiency.
Accordingly, both error component model and technical inefficiency effects model
have been estimated in one step approach after data have been transformed to log.
Maximum likelihood estimate of technical efficiency was obtained from half normal
model which was supposed to describe the data adequately. Technical inefficiency
effects are modeled as a function of area, cane age, cane variety, cane type (ratoon)
and soil type.The result revealed that various distributional assumptions of technical
inefficiency have approximately similar impact of on technical efficiency estimates.
On average, sugar cane production in each plot are 77% efficient, implying
that there is ample opportunity for the estate plot to raise output level at present
technology. |
