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Abstract
This study compares the empirical performances of the parametric distance functions(PDF) and data envelopment analysis (DEA) with applications to adopters of improved
cereal production technology in eastern Ethiopia. The results from both approaches revealed
substantial technical inefficiencies of production among the sample farmers. Technical
efficiency estimates obtained from the two approaches are positively and significantly
correlated. However, the DEA approach is shown to be very sensitive to outliers as
well as to the choice of orientation. The PDF results are relatively more robust. The results
from the preferred PDF approach revealed that adopters of improved technology
have average technical efficiencies of 79%, implying that they could potentially raise their
food crop production by an average 21% through full exploitation of the potentials of improved
varieties and mineral fertilizer. The results confirm that food production even under
improved technology involves substantial inefficiency. The paper concludes with a
discussion of potential underlying factors influencing farmer efficiency under improved
technology, such as poor extension, education, credit, and input supply systems.