Tea Out-grower Production and Marketing Challenges with Produc- tivity and Efficiency Analysis using Stochastic Frontier Approach in Southwest Ethiopia

Abstract

ea has a significant contribution to households’ cash income in the study area. However, decreasing productivity in the sector with price volatility led to a decline in output. Due to this fact, the studies were assess- ing the production trend with their bottlenecks, and identify the determinant of tea productivity and inefficien- cy through Cobb Douglas and stochastic frontier model. Data from a primary and secondary source of infor- mation were used from 135 tea out-growers. Based on the results, year 2017-018 has been used as production/ base year. However, the productivity of tea in the 2020 production year is increased by 41.8% as the coverage of land for tea becomes increased by 53.6%. Lack of skill and knowledge (79.2%), lack of training and extension service 90.3%), low productivity (88.1%), the occurrence of pest and disease (80.7%), climate change (80.7%), weak market linkage (88.1%), monopoly market (69.2%, output price fluctuation (88.9%), and lack of central- ized processing facilities (80.7%) were the key restraints on tea out-growers production and selling activity in the research area. The Cobb Douglas model indicated that labor force, fertilizer, land size, and improved seed all had an impact on tea productivity. While, technical inefficiency of tea production was determined by to level of education, the interaction of extension contact, distance to district market, harvesting time, training, and partici- pation to off/non-farm income. So, improving the skill and knowledge of farmers through increasing extension service and training, on-time delivery of farm inputs, create market linkage, and improved tea nursery manage- ment were some of the suggestions made to alleviate the study areas’ tea production and marketing difficulties