International Journal of Plant Breeding and Crop Science

Vol. 5(2), pp. 391-391, August, 2018. © www.premierpublishers.org. ISSN: 2167-0449

IJPBCS

Research Article
Efficiency and Yield Gap Analysis in Potato Production: The
Case of Potato Farmers in Central Highlands of Ethiopia
Daniel Hailu
Department of Agricultural Economics, Ethiopian Institute of Agricultural Research Institute (EIAR), P.O. Box
2003, Addis Ababa, Ethiopia
Email: [email protected] Tel: +251-913093079

The study examined efficiency, yield gap and level of responsiveness of output to the factors of
production in potato production in central highlands of Ethiopia. The study used household level
cross sectional data collected in 2015/16 from 196 sample farmers selected through multistage
sampling technique. A stochastic frontier model was employed for the efficiency analysis. The
scale coefficient for production function was calculated to be 1.1, indicating a 1% increase in all
inputs proportionally increases total production by 1.1%. The mean technical efficiency and actual
yield gap of sample households are 62.6% and 15.2 t/ha respectively. Eighty six percent of the
yield variation in potato production is due to technical inefficiency and accounts for 13.07 t/ha
yield gap. Therefore, efforts designed to improve efficiency would be more cost effective than
introducing new technologies such as developing new varieties as a means of increasing potato
production and productivity.

Key Words: Yield Gap, Efficiency, Production, Productivity, Improved Variety, Ethiopia.

INTRODUCTION

Potato (Solanum tuberosum L.) is the fourth major crop of urgent issue. Highlands are home to almost 90 percent of
the world after rice, wheat and maize and is the most Ethiopia's population with 2.4% growth rate (Leonie,
consumed food crop world-wide next to wheat and rice 2014). The rapid increase in both human and livestock
(Tewodros et al, 2014). A German immigrant is credited population has resulted in great pressure on land and has
with introducing potato to Ethiopia in 1858 and over led to decreased holdings of arable land (Million, 2001).
decades, farmers in Ethiopia's highlands began cultivating Fallow periods for restoring soil fertility have been reduced
potato as an insurance policy against cereal crop failures greatly in the smallholder farming systems and cultivation
(Potato world, 2008). is expanding to marginal and less fertile areas.
Intercropping and crop rotation have become common.
The International Potato Center (CIP), based in Peru,
estimates that Ethiopia may have the highest potential for A number of variety trials were conducted by national
potato production than any country in Africa, with 70 potato research program in different areas of the country
percent of its 13.5 million hectares of arable land mainly in to address problems of different agro-ecologies production
highland areas is believed to be suitable to potato constraints. Accordingly, as of 2010, 29 improved potato
cultivation (Potato world, 2008). Ethiopia can varieties with high-yielding potential, wide adaptation and
accommodate growing 3 million hectares of potatoes resistance/tolerance to diseases and pests have been
(Cornell, 2014). released (Baye et al., 2013).

According to the 2013 Global Hunger Index, levels of Six improved potato varieties were under production in the
hunger are still alarming or extremely alarming in 19 study area during the period of 2015/16 cropping season.
countries, including Ethiopia, meaning food security is an
Efficiency and Yield Gap Analysis in Potato Production: The Case of Potato Farmers in Central Highlands of Ethiopia
Hailu D. 392

Table 1: Potato varieties under production in 2015/16 cropping season

Suitable altitude Yield (t/ha) Year of
No. Variety
(m) Research Management (RM) Farmer Management (FM) release
1 Belete 1600-2800 47.2 28-33.8 2009
2 Gudene 1600-2800 29 21 2006
3 Guassa 2000-2800 24.4-33 22-25 2002
4 Digemegn 1600-2800 30-37 25.7 2002
5 Jalene 1600-2800 40.3 29.10 2002
6 Tolicha 1600-3000 23.8 20.2 1993

In Ethiopia the number of potato holders with potato is very contributing protein (low in amount, but high in biological
small (1.38) million potato farmers in 2015/16: it is value), vitamin C, zinc, and iron (CIP, 2012). Potato
estimated that there were about 23% of all root crop produce 54% more protein per unit of land area than wheat
producers. By 2015/16, the area cropped with potato is and 78% more than rice (Stevenson et al., 2001).
very small which is 70,131 ha. The cultivated area had
grown by 36% when compared to 2004/05. The production Potato is short cycle crops (3 to 4 months), and thus well
has increased from 509,716 tons in 2004/05 to 943,233 suited to the double cropping seasons particularly the rain-
tons in 2015/16 with 85% production volume increment. In fed system (Nteranya et al., 2015). Potato has a high
the last 12 years, potato productivity has progressed by potential for addressing food insecurity due to its
36.4% from 9.86 to 13.45 tons/ha (CSA, 2004/05, potentially high productivity per unit area about 40 t/ha
2015/16). (Graph 1). (FAO, 2008). Potato offers employment opportunities to all
those involved in potato value chain from production to
Nevertheless, the current area cropped with potato is very consumption. Potato is a suitable crop for places where
small and the national average yields are still far below land is limited and labor is abundant by reducing pressure
attainable yields and production does not meet the on land resulted from intercropping and crop rotation by
demand because of low productivity. restoring soil fertility.

Yield gaps are the difference between yield potential and

actual yields over a given spatial or temporal scale (Lobell
et al., 2009; Ittersum et al., 2013). There are different types
of potential yields, which give rise to three distinct types of
yield gaps. The first type of yield gap is the difference
between theoretical crop potential and experiment station
yield which is a base for scientists to conceive and breed
improved varieties. The second type of yield gap results
from the difference between experiment station yield and
potential farm yield due mainly to environmental conditions
and the technologies available at research stations that
are nonreplicable at the farm level. Finally, the third type
of yield gap is the difference between potential farm yield
and actual farm yield. This gap results mainly from
management practices, such as low input usage and lack
of improved seed and can be cost-effectively narrowed
(FAO, 2015).

Agricultural food demand is expected to increase by 50%

in 2050 (Tilman et al., 2011). Business as usual will not
Graph 1: Trends of estimated potato yields from 2004/05 meet projected global food demand in the coming years
to 2015/16. due to various factors. Three broad options to face the
global food demand (Licker et al., 2010): Expand the area
In Ethiopia, potato production could fill the gap in food of croplands at the expense of other ecosystems; Increase
supply during the months of July to August before the grain the yields on the existing croplands (closing the yield gaps)
crops are being harvested (Gebremedhin et al., 2013). and Reallocate current agricultural production to more
Potato is a smallholder cash crop and remains a key productive uses.
component in the livelihood system of most farmers,
contributing to food security as a direct food source Productivity can change due to differences in production
especially during hunger season. Potato produces more technology, differences in the efficiency of the production
food per unit area of land, compared to many other crops. process and differences in the environment in which
It can provide a cheap but nutritionally rich staple food, production takes place. One of the main reasons for low
Efficiency and Yield Gap Analysis in Potato Production: The Case of Potato Farmers in Central Highlands of Ethiopia
 Int. J. Plant Breed. Crop Sci. 393

productivity in agriculture all over the world, including Where, z= is desired level of confidence, P hat = is
Ethiopia is the inability of farmers to fully exploit the precision of an estimated proportion, and e = is required
available technologies, resulting in lower efficiencies of margin of error.
production.
Sample size adjusted for the size of the population (where
This study examines the difference between potential farm for small and medium)
yield and actual farm yield and determines to what extent N
the production could be increased and what potato n2  n1
growers in study district is losing and/or could achieve if all N  n1
other factors are controlled. Where, N = is the target population
Sample size adjusted for the design effect (complexity of
the survey):
MATERIALS AND METHODS
n3  d effect * n2
The study site Final Sample size adjusted for the response rate(r).
n3
Wolmera is one of the districts in central highlands of n
Ethiopia. The district is about 29 km away from the capital r
city of Addis Ababa along the Ambo rode. The area ranges
in elevation from 2,000 to 3,000 masl. The mean monthly Data Type and Sources
temperature of the district ranges from 10.8º C to 15.4º C
with an average annual rainfall of 1,054 mm. (World Potato Data was obtained from both primary and secondary
Atlas, 2009). The district has a total population of 100,439 sources using appropriate data collection instruments.
of which 50,281 (50.1%) are males and 95.3% of the Primary data was collected from 2015/16 cropping season
population has been living in the rural areas (CSA, 2013). using personally administered structured questionnaires.
The district is located in the vicinity of Holetta Agricultural Secondary data was gathered from country's statistical
Research Centre (HARC). report, crop variety register, annual reports, etc.

Sampling techniques Methods of Data Analysis

Multi stage sampling techniques was used. The district A Parametric Stochastic Frontier Production Function was
was selected purposively because potato is the major used to assess technical efficiency of potato producers in
potato growing/production area (World Potato Atlas, 2009; the study area. A Cobb-Douglas frontier production
Hirpa et al., 2010). Wolmera is a source of potatoes for function which has self-dual characteristics was used to
Addis Ababa and other urban markets. In the district six derive efficiency scores and elasticities of production
kebeles were selected purposively. The choice of kebeles inputs for the potato producers. The model was ruined by
for the survey was done on the basis of area coverage frontier 4.1c program and STATA 13 statistical packages.
under potato production, number of potato holders, larger The maximum likelihood estimates (MLE) of the Cobb-
potato production experience and their importance in Douglas based stochastic production function parameter
production supply to the market. is obtained from the summation of the coefficients of the
estimated inputs (elasticities). The estimated coefficient of
In collaboration with expertise of office of agriculture in the the regression equation indicates the elasticities of
district sampling frame prepared with up to date data. production for different inputs.
Finally, total samples of 196 potato-producing households
from the six kebeles proportional to the size were selected Following Coelli et al. (1998), Susan et al. (2014) and
by using systematic random sampling techniques. Mohiuddin M, et al. (2007), the elasticity of output (Ei) with
respect to the ith input measures the responsiveness of
Sample Size Determination output to a 1% change in the ith input (Xi) was computed
from the following Equation:
The sample size of potato producers was computed
according to the formula developed by Statistics Canada For Cobb-Douglas production function defined over N
(2010): that is a step-by-step approach where, first an inputs,
initial sample size is calculated and then it is adjusted for
the population, design effect and the response rate. Y  Axi 1 x2 2 ... x N  N , the output elasticities are En.
Y / Y
Initial sample size E( n )  Where, Y=yield of potato and Xi =
i X i / X i
z 2 pˆ 1  pˆ  different variable of inputs (i=1, 2, 3…N)
n1 
e2
Efficiency and Yield Gap Analysis in Potato Production: The Case of Potato Farmers in Central Highlands of Ethiopia
Hailu D. 394

The returns to scale analysis can serve as a measure of Seventeen percent of the household heads not attended
total factor productivity. The measure of returns to scale, any formal school at all. About 52.5% of the total sampled
RTS representing the percentage change in output due to households had at least 6 persons in the household.
a proportional change in use of all inputs, is estimated as
the sum of output elasticities for all inputs. The results of this study show that 73% of the farmers in
the study area do not receive off-farm income. This
The double log form of the Cobb-Douglas production indicates that majority of the farmers depend on farm
function model proved to be a superior alternative on activities for income generation. Ninety six percent of the
theoretical and econometric grounds. The specific Cobb- households had assets value falling below Ethiopian Birr
Douglas production model estimated is given by: 800,000.00. Average livestock holding per household in
6 the study area was 8.7 TLU (Tropical Livestock Unit).
Yi   0 *  X i i * e i
v ui 
------------------------ (2) The average land holding per household in the study area
i 1 was 2.4 ha. Ninety percent of the cultivated area in the
By transforming it into double log-linear form; study area reported better quality soil with 37.8% and 52%
6 for highly and moderately fertile soil respectively. The
ln Yi  ln  o   i  ln X i  ( vi  ui ) ------------------ (3) operated area under contracted land (either cash rented,
i 1 sharecropped, gifted or borrowed) were observed to be
51.2 percent substantially larger than the average size of
Where, Yi - represents potato output and Xi - represents owner-operated land.
potato production inputs by ith farmer. Whereas β0 & βi - are
the regression parameters to be estimated and ln - is Empirical Results
natural logarithm. The term vi - ui is a composed error term
where vi represents randomness (or statistical noise) and Partial Elasticity and Returns -to- Scale
ui represents technical inefficiency
The maximum likelihood estimates (MLE) of the Cobb-
From the error term component (vi - ui), vi is a two sided (- Douglas based stochastic production function was
∞ < v < ∞) normally distributed random error (v ~ N[0, σ2v]) specified to determine the possible relationships between
that represents the stochastic effects outside the farmer's the production of potato and inputs used. Estimated values
control. (example weather, natural disasters etc), of the coefficients and related statistics of the Cobb-
measurement errors, & other statistical noise while Ui is a Douglas production function for the sample farmers
one-sided (ui ≥ 0) efficiency component which is producing potato are presented in Table 2.
independent of vi and is normally distributed with zero
mean and a constant variance (σ2u) allowing the actual Table 2: Regression results of stochastic frontier
production fall below the frontier but without attributing all production function
short falls in output from the frontier as inefficiency. Input Standard
Coefficient Z
Variables error
Following Khan and Saeed (2011) and Bealu et al. (2013) plot area 0.214*** 0.056 3.80
the stochastic frontier production functions model will be seed 0.190*** 0.044 4.27
specified as follows: Fertilizer 0.148*** 0.042 3.53
Y  f ( X ; )  
i i i for i = 1, 2, …., n
i ------- (4) Chemical 0.077*** 0.019 3.90
oxen days 0.239*** 0.082 2.91
Whereby Yi is the output of farmer i, Xi are the input
variables, αi are production coefficients and ε is the error labor 0.196*** 0.057 3.41
term that is composed of two elements, that is: εi = vi - ui _cons 5.788 0.422 13.69
sigma_v 0.271 0.045
sigma_u 0.682 0.074
RESULTS AND DISCUSSION sigma2 0.539 0.086
lambda (λ) 2.512 0.111
Descriptive Results gamma (γ) 0.863
Number of obs = 196 Wald chi2(6) = 132.49
Total samples of 196 potato-producing households were Prob > chi2 = 0.0000 Log likelihood = -133.83
selected. From sampled respondents 86.2% were male Log likelihood-ratio test of sigma_u=0:
headed households. Farmer’s experience in potato chibar2(01) = 11.77 Prob>=chibar2 = 0.000
activities were ranged from 1 to 30 years (6.3 years, on Note: ***Significant at 1%
average). In terms of age, most of the sampled households
were relatively old with an average age of 40 years. Most The scale coefficient was calculated to be 1.07, indicating
of the sampled household heads had low levels of a percent increase in all inputs proportionally will increase
education. The average number of years in formal the total production by 1.07%. Potato production in the
education is 5 years, which is primary education. study area was in the stage I of the production surface.
Efficiency and Yield Gap Analysis in Potato Production: The Case of Potato Farmers in Central Highlands of Ethiopia
 Int. J. Plant Breed. Crop Sci. 395

Stage I is the stage of increasing return-to scale, where the varieties identified among sampled farmers. Most farmers
increase in output is more than proportional to the increase in this area grow improved varieties obtained from Holeta
in input. This implies that there is potential for potato Agricultural Research Center (HARC). Mean yield per ha
producers to continue to expand their production. for each variety was computed to determine which variety
was the most productive among the farmers. According to
The important parameter of log-likelihood in the half- the findings most of the farmers (95.9%) grew the Gudene
normal model is λ which λ=σu/σv. If the value of λ is equal variety which yielded 12.5 t/ha. This variety was prevalent
to 0 there are no technical inefficiency effects and all in all the six kebeles focused in the study.
deviations from frontier are due to noise. The estimated
value of λ=2.5125 is significantly different from 0 and the The second most commonly grown variety was the Belete
null hypothesis that there are no inefficiency effects is variety, which was developed and released in 2009 by the
rejected at 1% significance level. national research program and was found among 9.2% of
the sampled potato farmers. This variety also gave an
Technical Efficiency average yield of 11 t/ha.

Frontier version 4.1c computer program was used to Table 4: Yield potential and yield gap
estimate technical efficiency (TE). The results of the Potential Yield Actual Yield Yield Gap
Potato
efficiency scores indicate that there were wide ranges of (t/ha) (t/ha) (t/ha)
Variety
differences in TE among potato producing farmers. The FM FM FM
mean TE of sample households during the survey period Tolicha 20.2 7 13.2
was 62.6%. The TE among the households ranges from Guassa 22-25 5.8 17.7
0% to 92.8%, with standard deviation of 0.1771. Digemegn 25.7 11.7 14
Jalene 29.10 11.5 17.6
TE scores showed that the majority (more than 54%) of the Gudene 21 12.5 8.5
sample households had TE score of greater than 60% Belete 28-33.8 11 19.9
(Table 3). But there were also some households whose TE FM - farmer management
levels were below 25%. Households in this group have a
room to enhance their potato production at least by 67.8%. The current average farmers’ yields are too low, less than
Out of the total sample households, only 0.51% had TE 10 t/ha (9.9 t/ha) for materials with a potential to achieve
greater than 90%. This implies that about 99.5% of the 25.1 t/ha. The actual yield gap was large in all potato
households can increase their production by 10%. variety, and ranged between 8.5 t/ha and 19.9 t/ha of mean
Moreover, 50% of the sample households can increase actual yields. At a district level, the mean actual yield gap
their production at least by 28.5%. was 15.2 t/ha from yield potential suggesting ample room
to increase yields.
Table: 3. Efficiency Level Distribution of TE scores
TE
Efficiency Category
Freq. Percentage
0.00 < E ≤ 0.25 21 10.71
0.25 ˂ E ≤ 0.50 44 22.45
0.50 ˂ E ≤ 0.75 76 38.78
0.75 ˂ E ≤ 1.00 55 28.06
Total 196 100
Mean TE 62.6
Minimum TE 0.0
Maximum TE 92.8

Results indicate that potato farmers are 62.6 percent

technically efficient, implying significant potential in potato
production that can be developed. By shifting the average
farmer to the production frontier, the average yield would Graph 2: Yield gap in potato
increase by 15.7 tons per hectare and to the production
potential by 17.8 tons per hectare using the available Productivity and Efficiency
resources.
The results of Maximum Likelihood estimates of variance
Yield Gap Analysis parameters explain that variance parameter gamma (γ) is
the ratio of variance of farm specific technical efficiency to
The farmers in the district grow a wide range of potato the total variance of output and has a value between zero
varieties. Table 4 shows that there were six different potato and one. Results of gamma in (table 2) shows;
Efficiency and Yield Gap Analysis in Potato Production: The Case of Potato Farmers in Central Highlands of Ethiopia
Hailu D. 396

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