This study analysed the extent to which differences in household factor endowments, socio-economic characteristics and agricultural practices explain average land productivity in the Central Rift Valley of Ethiopia. The study was based on primary data (cross sectional), collected through structured questionnaire administered on 150 randomly selected smallholder farmers. Secondary data were also obtained by reviewing various governmental and non-governmental organizations’ documents and reports, books and academic research papers. Descriptive statistics and econometric techniques mainly multiple regressions using the Cobb Douglas production function model were employed to analyse the data and interpret the results accordingly. The results from the descriptive statistics showed that the majority of the respondents were male headed households, with the majority of the household members being children under the age of 18 years; more than 95% of the household heads were married; and more than 75% of the household heads attended their education only up to primary level. The average age and farming experience of the household head, household size and dependent family members, and farm size of the household were 41.7 and 22.3 years, 7.2 and 4.2 people, and 1.3 hectare, respectively. The results of production function estimates showed that, except capital and labour, all variables included in the model, such as seed (p<0.1), fertilizer (p<0.1), pesticide (p<0.1) and farm size (p<0.01) were statistically significant implying that these inputs are the most important factors that explain the difference in the value of total output of crops per unit of land. The results from individual total factor productivity per unit of land estimates showed that the significant variables are those variables linked to land characteristics, namely slope (p<0.01) and fertility (p<0.05) of the farmland; and agricultural practices, namely soil and water conservation (p<0.1) inferring that the better the land characteristics and agricultural practices are, the more the average land productivity will be. Based on these results, it is recommended that feasible policies that promote land ownership, irrigation agriculture, education and off farm activities should be put in place so as to enhance land productivity in the study area.

Keywords: Land productivity, production function, smallholder farmers, total factor productivity value of total output.