MEASURING THE IMPACT OF ETHIOPIA'S NEW EXTENSION PROGRAM ON THE PRODUCTIVE EFFICIENCY OF FARMERS

This paper employed a robust stochastic efficiency decomposition technique that accounts for scale effects to derive the technical, allocative, and overall productive efficiency of two samples of farmers, participants and non-participants in the New Extension Program (NEP), in two agro-climatic zones in eastern Ethiopia. Using data for the 2001/2002 agricultural year, we find that both groups of farmers in the two zones have considerable overall productive inefficiencies. In the wet highlands, although the participants in NEP used a superior technology and have higher technical efficiencies, their allocative efficiencies turned out to be lower than the non-participant farmers, relative to their respective technologies. However, both groups exhibit similar productive efficiencies. In the dry lands, apart from using homogeneous production technologies, the two groups do not have significantly different technical and allocative efficiencies and that they have similar productive efficiencies. Therefore, we find no empirical evidence of a positive impact of NEP on overall productive efficiency in both agro-climatic zones. An investigation of the influence of several socio-economic and institutional factors revealed that education, credit, previous participation in extension programs, off-farm income and the share of the leading cropping system have a positive impact on efficiency