Farm Size and the Share of Irrigated Land in total Landholding: the case of Water-Harvesting Irrigation in Ethiopia

Rain-fall shortage constrains production in small-holder agriculture in developing countries and with ongoing climate change these shortages may increase. Rain-water harvesting are interesting technologies that decrease this risk. Therefore, one would expect an increasing use of these technologies in drought-prone areas. However, data collected in Ethiopia shows that the share of irrigated land in total landholding declines with farm size. This study investigates why the share declines with farm size using panel data collected in 2005 and in 2010. A random-effect tobit model is estimated for the share of irrigated land as a function of variables affecting returns, market prices, source of finance and expectation formation. The findings show farm-specific factors such as credit per hectare, distance to market, ease of selling output, landholding, regional differences, aridity and distance of plots from natural water sources significantly affect the share. Thus, encouraging investment has to consider farm-size, and also geographical, environmental and regional diversity

Economic analysis of water harvesting technologies in Ethiopia

Rainfall shortage and variability constrain crop production of smallholder farmers in Ethiopia and climate change may even aggravate this problem. An attractive method to mitigate this is water harvesting. This thesis examines the economic aspects of water harvesting by exploring optimal water use and the impact of water harvesting using micro-econometric analyses of cross-section and panel data collected from Ethiopian farmers in 2005 and 2010. In the first empirical chapter, the study estimates marginal values and elasticitiesof harvested water in the production of three vegetables to determine whether water allocation is economically optimal. The results are mixed, although the estimated marginal product values between onions and tomatoes show that farmers on average allocate water economically across these two crops. The descriptive data show that the share of irrigated land is lower at larger farms. Because farm size may increase in the future, it is interesting to investigate what determines the share of irrigated land in relation to farm size. A random-effects tobit model is appropriate to estimate this relationship. The result shows that access to both credit and markets, farm-size, region, aridity, and plot distance to water source all affect the share. Encouraging water harvesting requires flexible and effective variables that will work also for larger farms. Despite its weather-risk reducing advantage, the average disadoption rate of water harvesting technology between 2005 and 2010 was as high as 42%. To find out why farmers disadopt, binary choice models are estimated to investigate the factors that cause disadoption. Based on the estimation results, it is concluded that increasing availability of plastic sheets and labour-saving equipment (water pumps), easier market and credit access, and the cultivation of perennials can reduce disadoption. The last empirical chapter focuses on the relation between water harvesting and fertilizer use. Due to weather risk, farmers may limit the use of purchased fertilizer, thereby continuing to grow a high share of low-risk and low-yield crops. To establish whether harvested water encourages fertilizer use, two variants of random-effect models are estimated. The results strongly support the idea that water harvesting technology induces fertilizer use, indicating that water harvesting can increase fertilizer use- and hence crop yields- in Ethiopia. The concluding chapter discusses the results against the background of the research objective: what are the economics of water harvesting at micro level? </p

Does water harvesting induce fertilizer use among smallholders? Evidence from Ethiopia

Rainfall shortage is a major production risk for smallholder farmers. Due to rainfall shortage, smallholders limit the use of modern inputs such as fertilizer and improved seeds. This study investigates if water harvesting technologies (WHTs) induce fertilizer use and whether there is joint adoption of fertilizer and water harvesting technologies. Using panel data collected from Ethiopian farmers in two regions in 2005 and 2010, a random effects probit model and a bivariate probit model are estimated to investigate these two issues. Both models include variables that are hypothesized to affect fertilizer and WHT use. The findings indicate that: (1) water harvesting increases the probability of using fertilizer; (2) past WHT use positively affects the probability of current fertilizer use but past fertilizer use does not affect current WHT use; (3) total landholding, farm capital, and education significantly increase the probability of fertilizer use whereas the price of fertilizer and distance to market decrease the probability of fertilizer use; (4) there are significant regional and yearly differences in fertilizer use; and (5) growing perennial crops, and distance from natural water sources increase the probability of using water harvesting in 2010 whereas distance from markets, age and altitude decreases it. These results imply that measures encouraging water harvesting can also lift low fertilizer use among Ethiopian smallholders

Empty pockets, empty ponds? Disadoption of water harvesting technologies in Ethiopia

This study analyses disadoption of water harvesting technologies in Ethiopia where the average disadiption rate in the sample areas is as high as 42%. Given that Ethiopia is a drought-prone country with 95% of its crop production being rain-fed, such a high disadoption rate for irrigation technologies is surprising and urges investigation. Using panel data on 332 Ethiopian farm households collected in 2005 and 2010 we estimate a logit model to identify factors underlying disadoption. We find farm-household, economic, technology-specific, and natural condition variables that relate to disadoption. Mainly, shortage of plastic-sheets, altitude, and distance to market increase disadoption whereas education, experience with water harvesting (learning-by-doing), farm profit, availability of family labour, access to credit, ease of selling output, growing perennial crops, and distance from natural water sources decrease the probability of disadiption. There is no evidence that malaria has a significant effect on disadoption. Based on these findings, improved supply of plastic sheets and motor pumps, and advise to afmers on appropriate crops, credit and improved market accesses could ontribute to decreasing disadoption of water harvesting technologies