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Open Access 02-08-2019 | Original Research

The Impact of Agricultural Technologies on Poverty and Vulnerability of Smallholders in Ethiopia: A Panel Data Analysis

Authors: Wubneshe Dessalegn Biru, Manfred Zeller, Tim K. Loos

Published in: Social Indicators Research | Issue 2/2020

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Abstract

Many studies evaluating the impact of adoption on welfare focused on adoption of a single technology giving little attention on the complementarity/substitutability among agricultural technologies. Yet, smallholders commonly adopt several complementary technologies at a time and their adoption decision is best characterized by multivariate models. This paper, therefore, examines the impact of multiple complementary technologies adoption on consumption, poverty and vulnerability of smallholders in Ethiopia. The study used a balanced panel data obtained from a survey of 390 farm households collected in 2012, 2014 and 2016. A two stage multinomial endogenous switching regression model combined with the Mundlak approach and balanced panel data is employed to account for unobserved heterogeneity for the adoption decision and differences in household and farm characteristics. An ordered probit model is used to analyze the impact on poverty and vulnerability. We find that the adoption of improved technologies increases consumption expenditure significantly and the greatest impact is attained when farmers combine multiple complementary technologies. Similarly, the likelihood of households to remain poor or vulnerable decreased with the adoption of different complementary technologies. We therefore conclude that the adoption of multiple complementary technologies has substantial dynamic benefits that improve the welfare of smallholders in the study area, and given the observed low level of adoption rates, we suggest that much more intervention is warranted, with a special focus on poorer and vulnerable households, to ensure smallholders get support to improve their input use.

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In this paper, vulnerability refers to “vulnerability to poverty”.

We used a chow test to see if the different combined practices have significantly different slopes.

For the independence of the different technology combinations, we used the Stata user command mlogtest to test the possibility of combining related technologies in MNL model and the chow test commands to test for slope differences in the outcome equations.

The consumption data are based on summing the expenditures of all sources of food and non-food consumption, deflated by a consumer price index, using 2012 as the base. It is expressed in monthly per capita units in ETB. The national poverty line in 2011/2012 prices is 3781 ETB/adult/year, thus the per capita monthly expenditure in this case is ETB 315.

1 US $ was equivalent to ETB 18.01 (July 2012).

One of the Kebelles in Agarfa Woreda (Oromia region) was dropped because of accessibility and security issues we faced during the 2014 survey round.

The smallest administrative unit of Ethiopia.

The different types of shocks reported were flooding, drought, illness of a family member as well as open grazing.

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Title: The Impact of Agricultural Technologies on Poverty and Vulnerability of Smallholders in Ethiopia: A Panel Data Analysis
Authors: Wubneshe Dessalegn Biru
Manfred Zeller
Tim K. Loos
Publication date: 02-08-2019
Publisher: Springer Netherlands
Published in: Social Indicators Research / Issue 2/2020
Print ISSN: 0303-8300
Electronic ISSN: 1573-0921
DOI: https://doi.org/10.1007/s11205-019-02166-0

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