| Abstract: | This article investigates the impact of environmental production conditions on smallholder farmers’ technical efficiency in Ethiopia for wheat, maize, and sorghum farming. We use a household panel data set with annual and cropping season environmental production conditions to estimate the technical efficiency scores. The results show that including environmental production conditions in the stochastic frontier has a significant impact on farmers’ technical efficiency scores. Technical efficiency scores improve when environmental production conditions are incorporated in the stochastic frontier. Thus, accounting for environmental production conditions reduces the inefficiencies that otherwise may be attributed to the characteristics of smallholder farmers. |
