Analysis of Technical Efficiency of Sugarcane Producing Farm Units

The major objective of the study made an investigation how far the Fincha Sugar Factory is technically efficient or not with what extent. As SFM result confirmed that among the causes of exogenous factors inducing variations in technical efficiency of sugarcane production within Fincha sugar factories, the foremost ones are; land fertility, number of plots, training, sick leaves measured in number of days, irrigation type (gravity irrigation system and pump irrigation system), location, soil type, education, planting system and irrigation setting time are the predominant variable that affect the technical efficiency of farm units of Fincha sugar factory. As it is observed from the value of gamma which is 96 % almost near to one (1) show implying the total variation in technical efficiency is caused by inefficiency variables. The value of ¿-estimate is significantly different from one, indicating that random error is playing significant role to explain the variation in Sugarcane production, existence of inefficiency and this is normal especially in case of agriculture where uncertainty is assumed to be a main source of variation.