IJPBCS

International Journal of Plant Breeding and Crop Science

Vol. 5(2), pp. 444-452, December, 2018. © www.premierpublishers.org. ISSN: 2167-0449

Research Article

Economic Analysis of Chickpea Production in Damot

Gale District, Southern Ethiopia
*Tamirat Girma1 and Tewodros Tefera2
1Agricultural
Economics Research Process, Wondo Genet Agricultural Research Center, P.O. Box 198, Shashemene,
Ethiopia
2School of Environment, Gender and Development Studies, College of Agriculture, Hawassa University, P.O. Box 05,

Hawassa, Ethiopia

The study examined determinants, resource use efficiency and profitability of smallholder
chickpea production in Damot Gale district. The study employed multistage sampling to collect
relevant primary data and used secondary data to substantiate the findings. A total of 146
producers selected from two administrative kebeles. Both qualitative and quantitative data were
used for the study. Descriptive statistics, production function, resource use efficiency index and
budgetary technique were the analytical methods employed in the study. The finding revealed
that output of chickpea was influenced by plot size, fertilizer, pesticide, oxen days, level of
education of the producer and the type of chickpea seed used positively and significantly.
Resource use efficiency index of plot size (4.1), seed (1.3), pesticide (15.7) and oxen power (2.8)
indicated the resources were underutilized while labor (-0.5) was the only over utilized resource.
The study revealed the production is profitable even with resource use inefficiency. The average
net revenue obtained by the typical chickpea producer was 20,377.87 birrs/ha with benefit cost
ratio of 2.7. Shortage of land, pest and disease, high price of fertilizer, grain price fluctuation, high
prices of improved seed and sudden drought were among important constraints of chickpea
production in the study area. Thus, concerned bodies should work on policy relevant significant
variables to improve the productivity, resource use efficiency and profitability of the production.

Keywords: Cobb-Douglas, Marginal value product, Profitability, Resource use efficiency

INTRODUCTION
Nearly 12.1 million tons of chickpea were produced in 2016
globally (FAOSTAT, 2018). India had the lion share of the
production (64.6%) followed by Australia (7.2%), Myanmar
(4.6%), Pakistan (4.3%), Turkey (3.8%) and Ethiopia
(3.7%) respectively (ibid).
Ethiopia, the sixth largest producer of chickpea in the world
and the leading producer in Africa, produced 444.15
thousand tons in 2016 (FAOSTAT, 2018). Chickpea is one
of the main pulse crop in the country both in terms of
cropped area and its role in direct human consumption.
Chickpeas (17%) are the third following broad beans
(31%) and haricot beans (20%) in terms of pulse grain
volume (CSA, 2016). The exported amount covers 27% of
the total chickpea production while the other (73%)
consumed domestically (Shiferaw et al., 2007). Chickpea
is categorized as a highland pulse crop grown in the cooler
highlands of the country (Asfaw, 2010). It has significant
Economic Analysis of Chickpea Production in Damot Gale District, Southern Ethiopia
potential to generate cash income, reduce poverty and
food insecurity, and to enhance soil fertility. The crop
provides an important source of food and nutritional
security for the rural poor, especially those who cannot
produce or cannot afford costly livestock products as a
source of essential proteins (Shiferaw et al., 2007). It can
reduce malnutrition and improve human health,
particularly for the poor, who cannot afford livestock
products (Asfaw, 2010). On the other hand, the national
average productivity of chickpea (1.83 ton/ha) in the
country is far below average research demonstrated
productivity potential (2.9 ton/ha) (IFPRI, 2010 and
Mulugeta et al., 2015).
*
Corresponding Author: Tamirat Girma, Agricultural
Economics Research Process, Wondo Genet Agricultural
Research Center, P.O. Box 198, Shashemene, Ethiopia.
Email: tamirat.girma@yahoo.com; Tel: +2510912781053
Girma and Tefera 445
Some studies attempted to assess cost of the production
and marketing part of chickpea (Shiferaw et al., 2007;
Tewodros, 2014a and Tewodros, 2014b). However,
studies on determinants of the production and resource
use efficiency of smallholders are limited in the country.
Therefore, this study assessed determinants of
production, resource use efficiency, profitability of
smallholder chickpea production and production
constraints in the study area.
METHODOLOGY
Study Area
Damot Gale district is located 375 km south of Addis
Ababa between the coordinates of 6º 53' 0'' and 7º 6' 30''
N Latitude and 37º 46' 0'' and 37º 58' 40'' E Longitude. It
has 31 administrative kebeles (Biruk, 2015 and Mesfin and
Zemach, 2015). The district is mainly characterized with
three agro ecologies; dega (22%), woyna-dega (49%),
dereq-woyna-dega (29%) and has average elevation of
2,110 m.a.s.l. The average temperature of the district
varies between 240C and 120C and has minimum and
maximum annual rainfall of 400mm and 900mm
respectively (Biruk, 2015). Agriculture is the mainstay of
people in Damot Gale with the major crop production of
wheat, teff, maize, potato, chickpea, and sweet potato.
Livestock is also another important part of the production
system in the district (ibid).
Study Population and Sampling Procedure
The population for the study comprises all chickpea
producers of the study area during the production season
of 2016-17. The study followed multistage sampling
technique to select the respondents. Major chickpea
producer kebeles were selected purposively in the first
stage. In the second stage, two kebeles were selected
randomly out of identified producer kebeles. In the third
stage, households produced the study crop were selected
purposively with the help of kebele development agents.
Finally, sample households were selected from
purposively selected producers using simple random
sampling to administer the survey. The total sample size
was distributed to selected kebeles based on the
probability proportional to size sampling technique. The
total sample size of 146 chickpea producers selected
based on Yamane formula (Yamane, 1967), which is
presented as follows:
N
n= (1)
1+N(e)2
= 230/ (1+230(0.0025)) = 146
Where n is the sample size, N is the population size, and
e is the level of precision (95% confidence level and e =
0.05 are assumed).
Economic Analysis of Chickpea Production in Damot Gale District, Southern Ethiopia
Table 1: Sample distribution between administrative
kebeles
Kebele Total household Chickpea Sample
heads of the producer size
kebeles households
Gacheno Female 130 37 23
Male 320 64 41
Taba Female 179 37 23
Male 499 92 58
Total 1128 230 146
Types, Sources and Methods of Data Collection
Both qualitative and quantitative data were collected for
the study. The data sources were both primary and
secondary ones. Primary data collected from sample
respondents, key informants, and focus group
discussions. The survey schedule was pre-tested in one
kebele that was not considered for the study. The primary
data collection was undertaken through trained
enumerators. The study employed key informant
interviews and one focus group to collect additional
information to cross check and supplement the primary
data collected from households using interview schedule.
Secondary data was gathered from journals, books, thesis
researches, reports of agriculture bureaus and rural
development to supplement the results found from the
primary data.
Method of Data Analysis
The study employed descriptive statistics, estimation of
production function, resource use efficiency index
calculated from ratio of value of marginal product (VMP) to
marginal factor cost (MFC) of each input and budgetary
technique to achieve the study objectives. The study used
STATA 12 to execute descriptive statistics and estimate
the production function. Whereas, Microsoft office excel
2007 was employed to compute the resource use
efficiency and profitability.
Estimation of production function
There are many types of production functional forms used
in empirical researches. Each functional form has its own
advantage and limitations. Choice of alternative production
functional forms is a matter of subjective judgment, guided
by consideration of goodness of fit, a priori economic
theory, ease of analysis, and judgment about the
economic implications drawn from the production function
estimates (Dillon and Hardaker, 1980). How well the model
satisfies the assumptions underlying the regression model
is an important criterion to choose from alternative
production functional forms (William and crown, 1998).
In this study, four most common types of production
functional forms (Linear, lin-log, log-lin and log-log) were
tested whether they better fit and appropriate to the
collected survey data. The collected data was checked for
 Int. J. Plant Breed. Crop Sci. 446

Table 2: Summary of explanatory variables and expected sign

Variable name Type of variables Unit of measurement Expected sign
Plot size Continuous Hectare +
Seed Continuous Kilogram +
Fertilizer Continuous Kilogram ±
Pesticide Continuous Liter +
Labor Continuous Man days ±
Oxen power Continuous Oxen days +
Education Continuous Schooling years +
Farming experience Continuous Years of farming +
Extension contact Continuous Number of contact in a year +
Nonfarm income Continuous Ethiopian birr +
Sex Dummy Dummy variable (0=female, 1=male) ±
Type of seed Dummy Dummy variable (0=local, 1=improved) +

outliers and missing values and existence of µi = stochastic disturbance term

multicollinearity before running regression. Then Linear, e = base of natural logarithm
lin-log, log-lin and log-log types of production functional ln= natural logarithm
forms was computed to select the model that was
appropriate for the data. Model specification test (ovtest), Resource use efficiency
heteroskedasticity test, and normality of error distribution
were undertaken for each alternative model. Cobb- Resource use efficiency was determined by comparing the
Douglas production function was selected as it has been marginal value product (MVP) with the marginal factor cost
found to fulfill important regression assumptions and most (MFC). It was assumed that farmers are price takers in the
of prior expectations to analyze chickpea survey data while input market, so that the price for ith factor approximates
the others fail to fulfill the assumptions. The result of MFC. Resource use efficiency index (RUEI) was derived
variance inflation factor (VIF) for each variable was less from the production function of equation 2 as follows
than 10 and the mean VIF was 1.70, which shows there (Chukwuji et al., 2006 and Eze and Nwibo, 2014):
was no severe multicollinearity among the explanatory ∂ (Yi)
MPxi = (4)
∂xi
variables. A test for heteroskedasticity was done using
Breusch-pagan test and the test was not significant
From equation 2:
suggesting that the data has no heteroscedasticity β β β
10 e(β11 D1 + β12 D2 + μi ) )
∂ (βo X1i1 X2i2 …X10i 𝑌̅
problem. The normality of the error was checked using a MPxi = = 𝛽𝑖 (5)
∂xi 𝑋̅𝑖
kernel density plot and the plot indicated the distribution of
the residual resembled normal pattern. The selected MPxi ∗PY MVPY
model did not have problem of misspecification. Cobb- RUEIxi = = (6)
Pxi MFCxi
Douglas production function is specified following Gujarati Where,
(2004) and Suresh and Keshava (2006) as follow. 𝐑𝐔𝐄𝐈𝐱𝐢 : is the resource use efficiency index of ith input,
𝐌𝐏𝐱𝐢 : is the marginal product of ith input,
β β β
10 (β11 D1 + β12 D2 + µi )
Yi = βo X1i1 X2i2 … X10i e (2) 𝛃𝐢: slopes with respect to ith regressor variable,
𝐗𝐢:ith input included in the production function,
Taking the natural logarithm of each side of equation 2 ̅: geometric mean of chickpea output,
𝐘
gives the linear expression as follows. ̅𝐢: geometric mean of ith input,
𝐗
lnYi = lnβo + β1 ln X1i + β2 ln X2i + ⋯ + β10 ln X10i + PY: is selling price per unit of chickpea output,
β11 D1 + β12 D2 + µi (3) 𝐏𝐱𝐢 : is cost per unit of ith input used,
𝐌𝐕𝐏𝐘 : marginal value of product of chickpea resulting
Where, from an additional unit of ith input and
Yi= output of chickpea in Kilogram 𝐌𝐅𝐂𝐱𝐢 : marginal factor cost of ithinput resulting from an
X1…X10 = continuous explanatory variables (plot size, additional unit of ith input.
seed, fertilizer, pesticide, human labor, oxen power,
education, farming experience, extension contact and Profitability analysis
nonfarm income respectively)
D1= Dummy variable for sex of household head (1 = male, Commonly used method budgetary technique was used to
0 = female) evaluate profitability of the smallholder chickpea
D2= Dummy variable for type of seed used by household production in the study area. Commonly known statistics
(1= improved seed, 0 = local seed) gross margin, net revenue and benefit cost ratio was used
βo = the intercept of the relationship (constant) to assess the profitability of the crop. Gross margin (GM)
β1 …β12 = regression coefficients with respect to each of an enterprise is gross revenue excess of the total
input used variable costs. Total variable cost is a summation of
Economic Analysis of Chickpea Production in Damot Gale District, Southern Ethiopia
Girma and Tefera 447

operational costs that vary with changes in scale of Table 3: Description of continuous demographic and
operation includes fertilizers cost, seed cost, chemicals socio-economic characteristics of respondents
cost, transport cost, bullock and labor cost etc. whereas, Chickpea producers (n=146)
fixed costs are depreciation cost of farm tools. Benefit cost Variables Unit
Mean Std.D Min. Max.
ratio is the ratio of the gross return and total cost of the Age Years 42 7.75 19 60
enterprise. The profitability statistics were specified and Family size Number 5 1.9 1 10
computed as follow (Eze and Nwibo, 2014 and Debertin, School
2012): Education 5 4.55 0 15
years
𝐺𝑅 = 𝑃𝑦 ∗ 𝑌 (7)
Livestock
𝐺𝑀 = 𝐺𝑅 − ∑ 𝑉𝐶𝑖 (8) TLU 3.11 0.96 0.51 6.57
holding
𝑇𝐶 = ∑ 𝑉𝐶𝑖 + 𝑇𝐹𝐶 (9)
Total land
NR= 𝐺𝑅 − 𝑇𝐶 (10) Ha 0.85 0.59 0.25 4.75
owned
𝐵𝐶𝑅 = 𝐺𝑅/𝑇𝐶 (11)
Where: Total annual
Birr 14,791 7,953 2,500 53,000
Py = Chickpea grain price income
Y = Chickpea yield (kg) Source: Author’s survey (2017)
GR = Gross revenue Std.D = standard deviation
GM = Gross margin
∑VCi = Summation of variable costs Table 4: Summary of categorical socio-economic variables
TC = Total cost Variables Response Number Percent (%)
TFC = Total fixed cost Marital status Single 7 4.79
NR = Net revenue Married 114 78.08
BCR = Benefit cost ratio Divorced 5 3.42
Widow 20 13.7
Educational Illiterate 52 35.62
RESULTS AND DISCUSSION status Literate 94 64.38
Access to credit Yes 109 74.66
Demographic and Socio-Economic Characteristics of No 37 25.34
the Respondents Cooperative Yes 123 85.42
membership No 21 14.58
The average age of sample household heads was 42 Source: Author’s survey (2017)
(Table 3). This revealed that sample households were in
their active working age. Majorities (78 %) of the Description of Output and Input Variables
respondents were married and the others 4.79%, 3.42%
and 13.7% were single, divorced and widowed Amount of output, inputs and their current prices in the
respectively. Out of the total household heads, 35.6% study area are summarized in table 5, 6 and 7. The
were illiterate while 64.4% were literate (Table 4). The average chickpea productivity was 1,690 kg/ha; which was
average schooling years of sample household heads was below the national productivity (1830 kg/ha). On average,
five. The average livestock holding for chickpea producers chickpea producers allocated 0.15 hectare of land for
ranges between 0.51 and 6.57 tropical livestock unit (TLU) chickpea production. The finding indicated that chickpea
with an average of 3.11 TLU (Table 3). Farmers in Damot producers used only DAP fertilizer for chickpea production.
Gale district have fragmented land size and land shortage On average, 116 kg/ha of DAP was applied by typical
was among the major constraints of production (Table 11). chickpea producer. Producers applied 0 to 235.3 kg/ha of
The average land size owned by typical chickpea producer DAP to the chickpea. Average seed rate used was 82
household was only 0.85 hectare. The maximum land kg/ha, which was nearly similar to the districts
holding for chickpea producer households was 4.75 recommendation (80 kg). Labor is an important factor of
hectare. The average annual income of chickpea production in subsistence agriculture because most of
producers was 14,791 Ethiopian birrs1 in the season farm operations undertaken using human labor. Different
(Table 3). Out of the total sample households, 74.7% of labors inputs were used in the study area and were
them had access to credit from different sources (Table 4). aggregated to man-days. Accordingly, the average labor
About 85.42% of the producers were cooperative used per hectare by the producers was 130.14 man-days.
members (Table 4), however, nearly all (97.26%) of them On average, producers used 11.65 oxen days/ha for
did not sell their chickpea grain for the cooperative. raising chickpea. Pesticides were most important
Farmers told this was due to the better price they could chemicals used by the producers. On average 0.78 l/ha of
obtain in the district market. Therefore, they did not want pesticide was used for chickpea production. Producers on
to sell for cooperative for the approximated fixed price.

Birr is Ethiopian currency

1
1 US dollar=23 Ethiopian birrs
Economic Analysis of Chickpea Production in Damot Gale District, Southern Ethiopia
 Int. J. Plant Breed. Crop Sci. 448

average earned 1,670 birrs from nonfarm activities in Table 6: Summary of dummy input variables used in the
production season of 2016-17. The mean farming econometric model
experience of chickpea producer households was 12 variables Category Number Percent (%)
years. Local and improved seed of chickpea was used by Sex of the Female (0) 46 31.51
the producers. According to key informant interview, household head Male (1) 100 68.49
improved seed (Kabuli type of chickpea) was introduced Type of seed used Local (0) 24 16.44
during 2009-2010. Before introduction of this type of Improved (1) 122 83.56
chickpea, local varieties (desi type of chickpea) were used Source: Own computation (2017)
for production. Majority (83.56%) of the producers were
user of seed of improved varieties. Table 7: Summary of output and input prices
Unit of
The grain price of chickpea fluctuates along with supply of Variables Mean Std.D
measurement
the grain. The average grain price of chickpea was 19.03
Price of chickpea grain birr/kg 19.03 3.56
birrs/kg in the area (Table 7). As it is a public property, land
Price of land birr/ha 5,721.72 661.25
do not have a market price in Ethiopia. Hence, the rental
price was used to compute the land value. For owned land, Price of seed birr/kg 20.12 3.51
rental value (opportunity cost) to the same quality and size Price of DAP birr/kg 14.63 0.93
of land in the locality was taken and for rented-in land, the Price of pesticide birr/l 518.72 69.38
actual amount paid was taken as its price. Accordingly, the Price of labor birr/man day 44.30 10.75
mean prices of land were 5,722 birrs/ha in Damot Gale Price of oxen power birr/oxen day 117.25 30.95
district. The amount paid by farmers to purchase seed was Source: Author’s survey (2017); Std.D = standard
recorded; whereas for owned seed, the price required for deviation
the same quality and quantity in the local market during the
same production season was considered. Accordingly, the Determinants of Chickpea Production
mean price was 20.12 birrs/kg. Group discussion revealed
that farmers most of the time buy fertilizers from Chickpea production relationship of the study area was
cooperative and sometimes from local market. The mean estimated using Cobb-Douglass production function,
price that the households paid for DAP was 14.6 birrs/kg. which was appropriately fitted to the survey data. The
On average, producers paid 518.72 birrs/liter for pesticide result of the model is presented in Table 8. The value of
to produce chickpea. The mean wages of 44.3 birrs/man- coefficient of determination (R2) for the regression was
day were recorded. Cost of oxen power was estimated as 0.8436 and this means that 84.36% of the variations in
the amount of cash paid for the renters per oxen day and chickpea output was explained by the factor inputs
the mean price found was 117.25 birrs/oxen-day. included in the model. From the F-value, it can be
concluded that the overall regression is significant at 1%
Table 5: Summary of output and continuous input level of significance and fits the data. The result indicated
variables used in the econometric model that output of chickpea was responsive to plot size, amount
Variables Unit Mean Std.D Min. Max. of fertilizer, volume of pesticide, oxen days, education of
Yield kg/ha 1,689.5 504.8 600 3,014 the household head and types of chickpea seed used.
Plot size ha 0.15 0.065 0.06 0.32
Fertilizer kg/ha 116 51.4 0 235.3 Plot size constitutes the most important factor of
Seed kg/ha 82 30.17 21.4 160 production with coefficient of 0.77. The coefficient was
Labor man days/ha 130.14 56.03 40 323.52 statistically significant at 1% level of significance. This
implies that 1% increase in the size of land under chickpea
Oxen oxen
11.65 6.74 6 35.71 production results 0.77% increase in chickpea output. The
Power days/ha
result was analogous with findings of Jirgi et al. (2010),
Pesticide l/ha 0.78 0.79 0 3.3
Mustefa (2014), and Hailemaraim (2015). The coefficient
Nonfarm
birr 1,670 1,910 0 12,000 of fertilizer was positive and significant at 1% level of
income
significance. This implies that 1% increase in fertilizer
Farming results 0.24% increase in chickpea output keeping other
years 12 6.57 1 29
experience factors constant. The result was consistent with prior
Number of studies undertaken by Hassen et al. (2015), Wogayehu
extension frequency 24 10.3 2 50 and Tewodros (2015), Wongnaa (2013), and Birachi et al.
contact (2011). The coefficient for volume of pesticide was
Source: Own computation (2017) positively signed (0.018) as expected. The influence was
Std.D = standard deviation significant at 1% level of significance. The result indicated
that, as the volume of pesticide applied increases by 1%,
the quantity of chickpea output increases by 0.018%. The
result was consistent with the finding of Wongnaa (2013)

Economic Analysis of Chickpea Production in Damot Gale District, Southern Ethiopia

Girma and Tefera 449

and Jirgi et al. (2010). However, Shalma (2014) found Resource Use Efficiency in Chickpea Production
opposite result the volume of agrochemicals influenced
output of soybean negatively and significantly in Nigeria. Cost minimization or a point of profit maximization is the
The study revealed that chickpea production was sensitive point where marginal factor cost equal with marginal value
to oxen power. The coefficient (0.187) of oxen power was product (MFC=VMP). The deviations from this point
positive and statistically significant at 1% level of causes inefficiency (Debertin, 2012). Therefore, resource
significance. Therefore, 1% increase in number of oxen allocation efficiency in chickpea production was
days used result in 0.187% increase in the chickpea investigated based on this economic principle. Resource
output, keeping other factors constant. The result was use efficiency index (RUEI) for chickpea plot size (4.1),
consistent with the finding of Hailemaraim (2015) that seed (1.3), pesticide (15.7) and oxen power (2.8) were
reported oxen power positively and significantly influenced greater than one (Table 9). The resource use efficiency
output. Education of the household heads was positively indices indicated that the resources were underutilized in
and significantly influenced output of chickpea at 1% level relation to the prevailing market conditions. Labor (-0.5)
of significance. The sign of the coefficient was as per the was the only over utilized resource in the study area as far
hypothesis. The result implies that an increase in as chickpea production is concerned. The result is in
schooling year by 1% results an increase of chickpea agreement with the finding of Josaphat et al. (2014) in his
output by 0.012%. The result was consistent with the study of resource use efficiency in soybean production in
findings of Wogayehu and Tewodros (2015) and Wongnaa Rwanda. The scarcity of land might restrict households to
(2013). Type of seed used was positively and significantly utilize too little of land for chickpea production in the study
influenced output of chickpea at 1% level of significance. area. On average sample households in the study area
The sign of the coefficient was as per prior expectation. own below one (0.85) hectare of land. Underutilization of
The coefficient implies households that used improved seed could be because of high cost of the input as this
seed of chickpea could possibly increase their chickpea input becomes expensive during sowing time. During
output than those used local type of seed indicating the group discussion, farmers told seed price raises highly at
importance of seed of high yielding varieties. Birachi et al. sowing time (up to 40 birr/kg). Fertilizer was the only input
(2011) found similar result during his investigation of that chickpea producer households efficiently utilized. This
factors influencing smallholder farmers’ haricot bean might be the result of good efforts of district extension team
production and supply to market in Burundi. in creating awareness about fertilizer application. Pesticide
was underutilized probably because they are expensive.
Table 8: Estimates of the Cobb-Douglas production Labor was over utilized probably because it was cheap as
function for chickpea production much of it comes from family labor. Family labor is difficult
Variables (Xi) Coefficients (βi) Std.D (σi) t-ratio to control unlike hired labor. Over utilization of oxen power
Plot size 0.7720*** 0.0729 10.59 might have emanated from the use of own oxen for the
Seed 0.0664 0.0472 1.41 production and properly less managed use of this
Fertilizer 0.0235*** 0.0068 3.44 resource. In general, the result of RUEI indicated that
Pesticide 0.0184*** 0.0059 3.14 resource use efficiency under chickpea production in the
Labor -0.0868 0.0586 -1.48 study area could be improved by increasing the use of
Oxen power 0.1869*** 0.0674 2.77 underutilized resources (plot size, seed, pesticides and
Education 0.0117*** 0.0038 3.05 oxen power) and decreasing use of labor.
Farming 0.0307 0.0264 1.16
experience Table 9: Resource use efficiency in chickpea production
Extension contact 0.0389 0.0378 1.03 Chickpea production (n=146)
Nonfarm income 0.0025 0.0026 0.94 Resources MPP MVP MFC RUEI
𝑌̅ (MPP*Py) (Pxi) (MVP/MFC)
Sex 0.0474 0.0457 1.04 (𝛽𝑖 )
𝑋̅ 𝑖
Type of seed 0.2591*** 0.0642 4.03 Plot Size 1244.17 23680.44 5721.72 4.1
Constant 6.4762*** 0.3201 20.23 Seed 1.41 26.92 20.11 1.3
Number of observations = 146 Fertilizer 0.80 15.17 14.63 1.0
R2 = 0.8436 Pesticide 427.83 8142.98 518.72 15.7
Adj_R2 = 0.8295 Labor -1.17 -22.21 44.30 -0.5
F-statistic = 59.78 Oxen power 17.32 329.68 117.25 2.8
Prob (F-statistic) = 0.0000 Note: Values of resource use efficiency index (RUEI) is
***, ** and * shows significance at 1%, 5% and 10% rounded to one decimal point
probability level respectively Source: Own computation (2017);
Source: Model output of authors’ survey (2017); Std.D = MPP = Marginal Physical Product, MFC = Marginal Factor
standard deviation Cost, MVP = Marginal Value Product

Economic Analysis of Chickpea Production in Damot Gale District, Southern Ethiopia

 Int. J. Plant Breed. Crop Sci. 450

Profitability karate) to alleviate the problem in the study area. About

81.51% of chickpea producers were reported the prices of
The study revealed that even if the resource allocation was fertilizers were high. Market price fluctuation (73.97%),
not efficient (Table 9) the production is profitable. The high prices of improved seed (72.6%) and sudden drought
average gross margin and net revenue obtained by typical (61.64%) were other important constraints of chickpea
chickpea producer was 21,068.50 and 20,377.87 birrs/ha production in the study area (Table 11).
respectively (Table 10). It was found that cost of labor
covered about 49% of total cost of production that might Table 11: Constraints in chickpea production
be for the reason that the activities like plowing, sawing, List of possible Response Number %
weeding, harvesting, chemical application and threshing constraints
were undertaken using human labor. This might call Market price fluctuation Yes 108 73.97
introduction of labor saving economical technology of Shortage of labor Yes 18 12.33
production. The result of benefit cost ratio indicated that Timely unavailability of
the producer obtained 2.7 birrs for each birr invested to the Yes 68 46.58
improved seed
production of chickpea in the study area, which is more High prices of improved
than two-fold of the production costs. Yes 106 72.6
seed
Pest and disease Yes 133 91.1
Table 10: Profitability analysis of smallholder chickpea Low fertility of the land Yes 36 24.66
producers High price of fertilizer Yes 119 81.51
Share of Lack of access to credit Yes 30 20.69
Particulars Unit Amount Shortage of land Yes 146 100
costs (%)
Seed cost birr/ha 1,649.84 14 Erratic rainfall/sudden
Yes 90 61.64
Fertilizer cost birr/ha 1,697.08 14.4 drought
Pesticide cost birr/ha 404.6 3.4 Shortage of improved seed Yes 61 41.78
Bullock cost birr/ha 1,365.96 11.6 Source: Author’s survey (2017)
Labor cost birr/ha 5,765.20 49
Cost of sprayer rent birr/ha 40 0.3 CONCLUSION AND RECOMMENDATIONS
Transportation costs birr/ha 160 1.4
Total variable cost birr/ha 11,082.69 94.1 Fertilizer was found positive and significant determinant of
Total fixed cost chickpea output. However, farmers blame the price was
birr/ha 130 1.1
(depreciation cost of tools) high. Therefore, the government should supply fertilizer on
Miscellaneous costs (5%) birr/ha 560.63 4.8 credit and work on how to reduce the price so that it could
Total cost birr/ha 11,773.32 100 be affordable to the producers. Education of the household
Yield kg/ha 1,689.50 head was found important in chickpea production. Thus,
Price of grain birr/kg 19.03 the government has to give due attention to farmers
GR birr/ha 32,151.19 training through strengthening adult education and farmer
training centers. Using improved seed of chickpea was
GM birr/ha 21,068.50
found positively and significantly influenced the output.
NR birr/ha 20,377.87 Thus, continuous and adequate supply of improved seed
BCR 2.7 has to be emphasized by the concerned body. Amount of
Source: Author’s survey (2017), 1 US dollar=23birr, pesticide applied was found positive and significant
GR = Gross revenue, GM = Gross margin, NR = Net determinant of chickpea output. This could be an indication
revenue, BCR = Benefit cost ratio of the presence of chickpea pests in the study area.
Therefore, the office of agriculture has to give due attention
Constraints of Chickpea Production for intensive monitoring and control measures, and timely
availability of pesticides. Amount of oxen days used was
Shortage of land was the major problem reported by all another determinant factor that positively and significantly
(100%) of the sample households in chickpea production influenced the output of chickpea. Therefore, as plowing is
(Table 11). Fragmentation of land holding might be due to the major activity done using oxen in the study area,
high population density in the study area. Improving appropriate plowing frequency has to be emphasized in
productivity using improved seed and agronomic practices the extension package.
could be a good option for the area. Pest and disease
were another critical problems reported by 91.1% of the Analysis of resource use efficiency indicated that chickpea
sample households (Table 11). As was identified during plot size (4.1), seed (1.3), pesticide (15.7) and oxen power
group discussion guaya-til and kishkish occurred (2.8) were underutilized. In general, the output of chickpea
frequently. Farmers used chemicals (Malathion and and the net return from the crop could be increased by

Economic Analysis of Chickpea Production in Damot Gale District, Southern Ethiopia

Girma and Tefera 451
increasing underutilized resources. Hence, the district
office of agriculture has to encourage more use of
underutilized resources and reduce the use of over utilized
resource (labor) to improve resource use efficiency in
chickpea production.
Shortage of land was the major problem identified by all
(100%) of the producers in chickpea production.
Fragmentation of land holding might be due to high
population density in the study area. Thus, the concerned
bodies have to focus on improving the productivity of
chickpea per unit area using improved seed and
appropriate management practices. Pest and disease
were another critical problems reported by 91.1% of the
sample households. As was identified during group
discussion, guayatil and kishkish were frequently occurred
on chickpea in the study area. Therefore, the government
should work on effective control measure of these pests to
improve the productivity of chickpea. High price of fertilizer
(81.51%), market price fluctuation (73.97%), high prices of
improved seed (72.6%) and sudden drought (61.64%)
were important constraints of chickpea production in the
study area. Therefore, the district office of agriculture has
to alleviate the identified problems.
ACKNOWLEDGEMENT
We are grateful to the Canadian International Food
Security Research Fund (CIFSRF) Project, which is
funded by Canadian International Development Agency
(CIDA) and International Development Research Center
(IDRC), for providing financial grant to the research work.
COMPETING INTERESTS
Authors have declared that no competing interests exist.
AUTHORS’ CONTRIBUTIONS
The first author designed the study, performed the data
collection and analysis, and wrote the manuscript. The
second author participated from the conception of the work
to the final write up by designing, editing and writing of the
manuscript. Authors read and approved the final
manuscript.
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Accepted 24 September 2018
Citation: Girma T, Tefera T (2018). Economic Analysis of
Chickpea Production in Damot Gale District, Southern
Ethiopia. International Journal of Plant Breeding and Crop
Science 5(2): 444-452.
Copyright: © 2018 Girma and Tefera. This is an open-
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