Risk Preferences as Determinants of Soil Conservation Decisions in Ethiopia

Soil degradation is one of the most serious environmental problems in the highlands of Ethiopia. The prevalence of traditional agricultural land use and the absence of appropriate resource management often result in the degradation of natural soil fertility. This has important implications for soil productivity, household food security, and poverty. Given the extreme vulnerability of farmers in this area, we hypothesized that farmers’ risk preferences might affect the sustainability of resource use. This study presents experimental results on the willingness of farmers to take risks and relates the subjective risk preferences to actual soil conservation decisions. The study looks at a random sample of 143 households with 597 farming plots. We found that a high degree of risk aversion significantly decreases the probability of adopting soil conservation. This implies that reducing farmers’ risk exposure could promote soil conservation practices and thus more sustainable natural resource management. This might be achieved by improving tenure security, promoting access to extension services and education, and developing off-farm activities that generate income.adoption, Ethiopia, risk preference, soil conservation

Measuring Male-Female Productivity Differentials in Ethiopian Agriculture: Policy Implications for Improving the Livelihood of Female Farmers

An understanding of the efficiency with which women farmers are operating, particularly where they account for the largest share of the labor force required for agricultural production, is essential for designing appropriate policies to improve the overall performance of agriculture as well as the livelihood of women farmers. This paper contributes to the gender productivity debate by drawing on crop production data collected in three districts (Ada, Akaki and Gimbichu) in East Shoa, Ethiopia during the 1999/2000 cropping season through detailed multi-visit surveys of 80 farm households of which 39 were female-headed households. Using the Tornqvist-Theil index, Total factor productivity (TFP) is measured to analyze crop production efficiency differentials between male and female headed households. The analysis demonstrates that there is little evidence that male-female differences per se account f or productivity differentials in crop production. The results imply that the variation in overall TFP can only arise due to differentials in access to the quality of human and physical resources and services, and differential control of the benefits from output by women versus men. Hence, appropriate institutional frameworks that reduce cultural and social barriers associated with women farmers' access to such resources and benefits should be developed. Policies targeted towards increasing female farmers' access to education, extension services, credit, adequate amount of quality land and other resources including control over the benefits, will improve the overall productivity and livelihood of female farmers.Agricultural efficiency, total factor productivity, gender, Ethiopian agriculture, Labor and Human Capital, D2, Q12, Q18,

Live animal and meat export value chains for selected areas in Ethiopia: Constraints and opportunities for enhancing meat exports

The Ethiopian live animal and meat export marketing system is operating in an environment characterized by several constraints that needs the attention and action of the government and other non-governmental development organizations. Despite the reported high livestock population of the country, the major meat and live animal exporters are complaining of shortage of supply and inferior quality of animals (especially shoats). The problem could be because of the constraints in the marketing system of exporters themselves, the market information system, poor market infrastructures like road, seasonality in production, competition of the domestic and the export sector, problems in the production system, or a combination of several factors. Thus, it is imperative to identify the major factors contributing for the reported supply shortage that has hindered smooth functioning of the Ethiopian live animal and meat export market and take appropriate action as much as possible. This study, therefore, characterizes live animal and meat export value chains to determine constraints and opportunities for enhancing the efficiency of meat export from Ethiopia. The study was conducted using a Rapid Market Appraisal (RMA), which is a method that offers a quick and effective means for learning about the main characteristics of the marketing system, mapping the supply chains, understanding constraints and opportunities, and generating information as a basis for designing follow-up research such as focused survey of value chain components and actors

The Tilling of Land in a Changing Climate:Panel Data Evidence from the Nile Basin of Ethiopia

Empirical studies point to reduced tillage as a means to increase yields and reverse land degradation. A relatively neglected avenue of research concerns why farmers increase tillage frequencies. Using household plot–level panel data from the Nile Basin of Ethiopia, this article applies a random effects ordered probit endogenous switching regression model to empirically investigate the impact of weather events and other conditioning factors on farmers’ choice of tillage intensity and the effect of changing tillage frequencies on differences in farm returns. Results indicate that, while low-frequency tillage is more likely in drier areas, plot-level shocks (such as pests and diseases) are key variables in the choice of high-frequency tillage. Adoption of a low-till approach leads to increasing farm returns in low-moisture areas but high-frequency tillage provides higher returns in high-rainfall areas. Understanding how farmers’ tillage options correlate with climatic conditions and farm economies is salient for developing effective adaptation and mitigation plan

Farming or burning? shadow prices and farmer’s impatience on the allocation of multi-purpose resource in the mixed farming system of Ethiopia

In crop-livestock mixed farming system where farm yard manure (FYM) is considered as important multi-purpose resource such as source of soil organic matter, additional source of income and household source of energy, soil fertility depletion could takes place within the perspective of the household allocation pattern of FYM. This paper estimates structural FYM-allocation model in the presence of corner solution, with the objective of examining the role of various returns to FYM and farmer’s impatience on the propensity to allocate FYM for alternative purposes. We illustrate the model using data based on a random sample of 493 farm households in the central highlands of Ethiopia. We find that the higher the selling price of FYM is the higher the incentive for farmers to divert the resource from farming to marketing for burning outside the farm households. A farmers’ decision to turn FYM from farming to marketing due to heterogeneity in time preference is also an alternative account to explicate the correlation between farmers’ impatience and resource allocation. The implication is that the high discount rate and the rise of price encourage current consumption that has long term effect on the sustainable management of soil resource. The results are of paramount importance for the design of sustainable land management policy where soil fertility depletion is salient for low agricultural productivity

Essays on the Economics of Sustainable Agricultural Technologies in Ethiopia

Abstracts This thesis consists of five self-contained papers: Paper 1: Adoption of multiple sustainable agricultural practices in rural Ethiopia The adoption and diffusion of sustainable agricultural practices (SAPs) have become an important issue in the development-policy agenda for Sub-Saharan Africa, especially as a way to tackle land degradation, low agricultural productivity, and poverty. However, the adoption rates of SAPs remain below expected levels. This paper analyzes the factors that facilitate or impede the probability and level of adoption of interrelated SAPs, using recent data from multiple plot-level observations in rural Ethiopia. Multivariate and ordered probit models are applied to the modeling of adoption decisions by farm households facing multiple SAPs which can be adopted in various combinations. The results show that there is a significant correlation between SAPs, suggesting that adoptions of SAPs are interrelated. The analysis further shows that both the probability and the extent of adoption of SAPs are influenced by many factors: a household’s trust in government support, credit constraints, spouse education, rainfall and plot-level disturbances, household wealth, social capital and networks, labor availability, plot and market access. These results imply that policy makers and development practitioners should seek to strengthen local institutions and service providers, maintain or increase household asset bases, and establish and strengthen social protection schemes, to improve the adoption of SAPs. Paper 2: Cropping systems diversification, conservation tillage and modern seed adoption in Ethiopia: Impacts on household income, agrochemical use and demand for labor The type and combination of sustainable agricultural practices (SAPs) adopted has a significant effect on agricultural productivity and food security. Previous studies on adoption and impact have focused on single practices. However, in reality several adoption decisions are made simultaneously. We developed a multinomial endogenous switching regression model of farmers’ choice of combination of SAPs and impacts on maize income and use of agrochemicals and family labor use in rural Ethiopia and found four primary results. First, adoption of SAPs increases maize income and the highest payoff is achieved when SAPs are adopted in combination rather than in isolation. Second, nitrogen fertilizer use is lower in the package that contains systems diversification and conservation tillage. Third, conservation tillage increased pesticide application and labor demand, perhaps to compensate for reduced tillage. However, when it is used jointly with systems diversification practices such as legume rotations it does not have a significant impact on pesticide and labor use. Fourth, since women contribute much of the farm labor needed for staple crops, adoption of packages increases their workload, in most cases, suggesting that agricultural intensification technology interventions may not be gender neutral. This implies that policy makers and other stakeholders promoting a combination of technologies can enhance household food security through increasing income and reducing production costs, but need to be aware of the potential gender related outcomes. Paper 3: The impact of shadow prices and farmers’ impatience on the allocation of a multipurpose renewable resource in Ethiopia In a mixed farming system in which farmyard manure (FYM) is considered an important multipurpose renewable resource that can be used to enhance soil organic matter, provide additional income, and supply household energy, soil fertility depletion could take place within the perspective of the allocation pattern of FYM. This paper estimates a system of FYM allocation regressions to examine the role of returns to FYM and farmers’ impatience on the propensity to allocate FYM to different uses. We parameterize the model using data from a sample of 493 households in Ethiopia. Results indicate a heightened incentive for diverting FYM from farming to marketing for burning outside the household when returns to selling FYM and the farmer’s discount rate are high. These reveal the need for policies that will help to reduce farmers’ impatience and encourage the substitution of alternative energy sources to use FYM as a sustainable land management practice. Paper 4: Jointness in agricultural production and livestock technology adoption in Ethiopia Even though farmyard manure is considered a promising soil fertilizer in many developing countries, its use in soil fertility restoration is constrained by a multitude of factors. Yet the adoption of a crop-livestock technology could relax these constraints. This paper examines the impact of a joint crop-livestock technology on farmyard manure production and the effect of farmers’ risk preference on livestock technology adoption. An endogenous switching regression model is employed to account for self-selection in technology adoption. The model is implemented using survey data from 491 households collected in the central highlands of Ethiopia. The results show that farmers’ risk preference, distance to the extension service center, and market access to complementary inputs significantly influence the adoption of improved livestock technology. Adoption of crossbreeding technology creates a positive and significant impact on organic fertilizer production. The positive indirect effect of crop technology is significantly higher for those who adopt livestock technology. This implies that a policy supporting crop-livestock synergies through joint provision of technologies is important in order to increase agricultural productivity through better soil fertility management. Paper 5: Risk preferences as determinants of soil conservation decisions in Ethiopia Soil degradation is one of the most serious environmental problems in the highlands of Ethiopia. The prevalence of traditional agricultural land use and the absence of appropriate resource management often result in the degradation of natural soil fertility. This has important implications for soil productivity, household food security, and poverty. Given the extreme vulnerability of farmers in this area, we hypothesized that farmers’ risk preferences might affect the sustainability of resource use. This study presents experimental results on the willingness of farmers to take risks and relates the subjective risk preferences to actual soil conservation decisions. The study looks at a random sample of 143 households with 597 farming plots. We find that a high degree of risk aversion significantly decreases the probability of adopting soil conservation. This implies that reducing farmers’ risk exposure could promote soil conservation practices and thus more sustainable natural resource management. This might be achieved by improving tenure security, promoting access to extension services and education, and developing income-generating off-farm activities. JEL Classification: D81, Q01, Q12, Q16, Q18, Q24, Q57 Key words and phrases: Ethiopia; Adoption; risk preference; soil conservation; mixed farming; technology; Impatience; Shadow price; Allocation; Farmyard manure; Sustainable Agricultural Practices; switching; Multivariate probit; Ordered probit; multinomial switching regression; income; agrochemicals use; demand for labour. ISBN: 978-91-85169-70-2 Contact information: Hailemariam Teklewold, Department of Economics, School of Business, Economics and Law, University of Gothenburg, PO Box 640, SE 405 30, Gothenburg, Sweden. Tel: +46 76 5843729; e-mail: [email protected]

Gender differences on the choices of a portfolio of climate change adaptation strategies in Ethiopia

Gender-based intra-household resource distributions constitute an important role in technology adoption-related decisions. Using a non-unitary household model and fitting an empirical adoption model for men and women individually and jointly, we examine how gender-based ownership, management and control of resources are correlated with adoptions of a portfolio of climate change adaptation strategies. Our analysis is based on recent household survey data with detailed household plot-level information about adaptation strategies, plot ownership, farm management decisions, and the right to control outputs from the plots among spouses within the household. The observed patterns of women’s ownership, management and economic rights of land suggest that all are important aspects of women’s bargaining power. We found compelling evidence regarding the overlapping effects of the different gender-linked-land-based rights on the adoption of a portfolio of adaptation strategies. The empirical findings emphasize the importance of incorporating gender-based intra-household interactions and joint resource ownership and decision making in climate change adaptation