- Title
- An empirical investigation of technical efficiency, technology adoption and welfare of smallholder farmers in Ethiopia
- Creator
- Geffersa, Abebayeh Girma
- Relation
- University of Newcastle Research Higher Degree Thesis
- Resource Type
- thesis
- Date
- 2020
- Description
- Research Doctorate - Doctor of Philosophy (PhD)
- Description
- The objective of this thesis was to investigate the technical efficiency, technology adoption and welfare of smallholder farmers in Ethiopia. Despite decades of advances in agricultural technologies, many developing countries have failed to achieve food security and poverty reduction. This is most notable in sub-Saharan Africa (SSA), where rising food insecurity and rural poverty remain major developmental challenges, despite overarching policies to disseminate productivity-enhancing agricultural technologies. Ethiopia is one of the most populated countries in Africa and has the largest population of rural poor, whose livelihood depends on smallholder agriculture. Since the mid-2000s, the Ethiopian government has focused on implementing agricultural policies aimed at improving smallholder agriculture to enhance rural development. The government placed great emphasis on improving the productivity of major food crops, such as maize, through the provision of extension services to boost the dissemination of modern inputs and the efficiency of input allocations. Despite these efforts, food insecurity and rural poverty remain major developmental challenges in Ethiopia. This thesis comprises three empirical studies that address the implications of smallholder crop production in Ethiopia in light of understanding the role of smallholder agriculture in achieving food security and rural poverty reduction. The first study used a meta-regression analytical framework to investigate the technical efficiency of smallholder crop production across agroecological zones in Ethiopia. The empirical results indicate a high level of technical inefficiency in the smallholder crop production in Ethiopia. From 1991 to 2016, the estimated mean technical efficiency of crop production was 66%. The meta-regression results revealed that the technical efficiency of smallholder crop production varied across studies and agroecologies. We found that reported efficiency estimates were significantly influenced by the frontier methodology used, the functional form, assumptions about technology representation, the estimated dimension of the model, output aggregation and the publication outlet. The findings highlight that, when estimating technical efficiency, it is necessary to consider the appropriateness of the modelling approach and the agroecologic variations. Failure to do so biases efficiency estimates. The second study evaluated the technical efficiency of smallholder maize farmers in Ethiopia in terms of three of the country’s major maize producing regions that feature agroecological variations. The study used comprehensive panel data and a novel stochastic metafrontier framework to disentangle technological heterogeneity arising from regional variations and crop variety differences. The empirical results demonstrate that maize farmers in all three regions—Oromia, Benishangul-Gumuz and Southern Nations Nationalities and People (SNNP)—are producing below their potential output, given the available technology and the prevailing environmental conditions. For maize production in the Oromia, Benishangul-Gumuz and SNNP regions, the mean technical efficiency estimations were, respectively, 55.7%, 46.2% and 54.6% and the estimated technology gap estimates were 86.7%, 68.2% and 82.8%. This demonstrates that maize farmers in Benishangul-Gumuz operated far below the frontier, compared with farmers in the Oromia and SNNP regions. Additional results indicate technology gaps and significant differences in technical efficiency between adopters and non-adopters of improved maize varieties (IMV). This suggests a need for the increased adoption of IMV to enhance the technical efficiency of maize farmers. The third study examined IMV adoption and its effect on the welfare of smallholder maize farmers in Ethiopia. It controlled for unobservable farm household heterogeneity and endogeneity. The empirical results reveal that the adoption of IMV increases the welfare of maize farmers. The use of IMV resulted in an increase in household income to such a degree that it raised households above the US$1.90 poverty line. The empirical results revealed that a 10% increase in the area allocated for IMV production was associated with a reduction in the probability of being below the US$1.90 poverty line by about 4.79%. However, the study also confirmed that the welfare-enhancing effect of IMV adoption was heterogeneous across farm households. By disaggregating the welfare effect into various groupings, the study revealed that farm households were not equally able to capitalise on IMV due to disproportionate access to physical resources and environmental differences. The key factors constraining the adoption of IMV were the lack of access to family labour and physical resources (such as land), the low level of maize price and limited access to market, the lack of access to improved maize seeds, or credit, and the lack of an effective extension service. This thesis makes three major contributions, which have important policy implications. The first contribution is based on the findings of Study 1, which provides new empirical evidence to demonstrate the importance of agroecologies in Ethiopia. This finding highlights the need to be cognisant of differences in agroecologies when formulating and implementing policies aimed at enhancing technical efficiency in smallholder crop production in Ethiopia. The second contribution pertains to the findings of Study 2, which employed a comprehensive data set and novel econometric techniques to estimate the level of technical efficiency and technology gaps across three major maize producing regions in Ethiopia. The empirical findings indicate that the mean technical efficiency is below the optimal level required to achieve the maximum possible output in maize production. This re-emphasises the need for policies tailored to the agroecological differences across Ethiopia and the corresponding agronomic practices of maize farmers. The third contribution comes from Study 3, which provides new empirical evidence concerning the effect of IMV adoption on farm household welfare. By controlling for unobserved farm household heterogeneity, Study 3 demonstrated that the adoption of IMV increases the welfare of smallholder maize farmers in three regions of Ethiopia. This finding highlights the importance of IMV adoption, which has the capacity to increase the welfare of farmers and thereby reduce poverty in Ethiopia.
- Subject
- technology adoption; household welfare; rural poverty; technical efficiency; improved maize; smallholder agriculture; farm heterogeneity; Ethiopia
- Identifier
- http://hdl.handle.net/1959.13/1422492
- Identifier
- uon:37840
- Rights
- Copyright 2020 Abebayeh Girma Geffersa
- Language
- eng
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