Abstract

Derartu B. Defar1, Kenenisa Tulu Gebrselassie, O. W. Yifter and Tilahun Ephraim

This study analyzed the efficiency of crop-livestock production and assessing their potential for improvement in North-East Ethiopian highlands. Cross-sectional data were used to analyze the economic efficiency of mixed crop and livestock production system and identify its determinants factors from 252 farmers who were selected using probability proportional to sample size sampling technique. The parametric method stochastic frontier approach was employed to measure economic efficiency. The parametric methods of efficiency measurement indicated that most farmers in the study area were not efficient suggesting that efficiency improvement is one of the possible avenues for increasing agricultural production with available resource and technology. The mean Technical Efficiency (TE), Allocative Efficiency (AE) and Economic Efficiency (EE) of the household calculated from parametric approach of stochastic frontier analysis were 62%, 51% and 29%, respectively. The production efficiency of mixed croplivestock farming system was determined by farm size, livestock ownership, labour availability, off/non-farm income participation, total household asset, total household consumption expenditure and improved technology adoption. This study found that improved agricultural technology adoption significantly improved production efficiency of households. Such actions may, in turn, alleviate the current problem of food insecurity and lead in the long run to economic development in the country.