Technical Efficiency of Smallholder Dairy Farmers in the Central Ethiopian Highlands

Despite having the second largest livestock population in Africa and favorable climate, the contribution of the livestock, especially the dairy sector to the Ethiopian economy is minimal. The per capita consumption of dairy products of 16 liters is one of the lowest in the world. With increasing income and urbanization, the demand for dairy products is expected to increase. A number of studies have examined the potential of the dairy sector to satisfy existing as well as future demand for dairy products. Most of the studies, however, focus on technological constraints such as poor genotype of indigenous animals, tropical animal diseases, availability of feed and other related services and recommend costly technological solutions aimed to alleviate those constraints. Yet there is evidence of inefficiency and significant post harvest losses of milk. We used a Cobb- Douglas stochastic production function to analyze the inefficiencies of a random sample of 74 smallholder dairy farmers in the Central Ethiopian Highlands. Results show that forage and concentrate feed, number of cross breed cows and expenditures on veterinary services are significant determinants of milk output. We also found evidence of systematic inefficiency in dairy production associated with farmers' educational level and livestock training that explains almost 90% of the variation in milk production. The average efficiency score of farmers in the sample is 79%. Thus milk output can be increased on average by 21% with existing technology by training farmers in modern management practices in feeding, calving, milking, storing, processing and marketing.Smallholder dairy, technical efficiency, stochastic production function, Ethiopia, Livestock Production/Industries, Productivity Analysis,

A General Equilibrium Analysis of the Impact of Eliminating US Cotton Subsidies on US and World Cotton Market

Industrialized developed countries are blamed for the impasse in the Doha round of world trade negotiations by refusing to deal with their supports to agricultural sector. The OECD countries together annually spend about $300 Billion on agricultural subsidies. The US, EU and Japan alone account for almost 82% of the subsidies. The US cotton subsidy, which has been ruled illegal by the WTO after a successful challenge from Brazil, Australia and four African countries, has become the target of domestic and international critics. This paper simulates the potential impacts of removing all the US cotton subsidy programs using the multiregion GTAP applied general equilibrium model. Results predict that, as a result of the removal of the subsidy, US cotton output would decrease by 26% and US domestic price rises by 31%. The US cotton export is also expected to decline by 65% and the world price of cotton is expected to rise by 5.6%. Other major cotton producers are expected to respond to the decrease in US output and exports and the higher world prices. Consequently, cotton output is expected to increase by 15% in Australia, by 10% in SSA, 5.2% in Brazil. The welfare effects indicate that, the US, Australia, SSA and Brazil are the major beneficiaries of this policy while Asian cotton importers and other subsidizing producers such as EU, the former USSR and Eastern European countries would lose from the implementation of the policy

Technical Efficiency of Smallholder Dairy Farmers in the Central Ethiopian Highlands

Despite having the second largest livestock population in Africa and favorable climate, the contribution of the livestock, especially the dairy sector to the Ethiopian economy is minimal. The per capita consumption of dairy products of 16 liters is one of the lowest in the world. With increasing income and urbanization, the demand for dairy products is expected to increase. A number of studies have examined the potential of the dairy sector to satisfy existing as well as future demand for dairy products. Most of the studies, however, focus on technological constraints such as poor genotype of indigenous animals, tropical animal diseases, availability of feed and other related services and recommend costly technological solutions aimed to alleviate those constraints. Yet there is evidence of inefficiency and significant post harvest losses of milk. We used a Cobb- Douglas stochastic production function to analyze the inefficiencies of a random sample of 74 smallholder dairy farmers in the Central Ethiopian Highlands. Results show that forage and concentrate feed, number of cross breed cows and expenditures on veterinary services are significant determinants of milk output. We also found evidence of systematic inefficiency in dairy production associated with farmers' educational level and livestock training that explains almost 90% of the variation in milk production. The average efficiency score of farmers in the sample is 79%. Thus milk output can be increased on average by 21% with existing technology by training farmers in modern management practices in feeding, calving, milking, storing, processing and marketing