Smallholder farmers in Ethiopia's central highlands are not using their resources efficiently when growing teff, wheat, and chickpea. Factors like family size, farming experience, and membership in associations affect this inefficiency. Farmers who are involved in community activities tend to use their resources better. By improving resource use efficiency, farmers could increase their income by about 31.28%. To boost efficiency and productivity, it's important to expand nonfarm sectors, reform farmer associations, involve community leaders, and improve market infrastructure.