Onion productivity in Ethiopia is below world average due to improper agronomic practices, existence of limited technology and poor marketing. The study was aimed to measure the level of economic efficiency and identify the factors that influence the efficiency levels of onion producers in North Gondar. Semi structured interview schedule was employed to collect primary data from 205 onion producers selected through simple random sampling proportional to sample size from Gondar Zuria, Takusa and Dembia Districts. To examine the farm level economic efficiency of onion production; descriptive statistics, stochastic frontier and two-limit Tobit model was employed. The maximum likelihood estimates of stochastic frontier analysis indicated that the mean technical, allocative and economic efficiency of onion was 53%, 60%, and 68%, respectively. The implication of the mean production efficiency of onion could be increased through improving farming practices with the existing technology. Watering frequency, education, livestock holding, experience, family size, training, and plot slope affected onion production. Therefore, governmental and/or private institutions should work to improve the production of onion by providing the necessary institutional support to the smallholder farmers in the study areas.

Keywords: efficiency, Ethiopia, SFP, onion, two-limit-Tobit model