Abstract
BackgroundTheory of development economics emphasizes how individuals transit out of poverty. Adoption of improved agricultural technologies is one of the means that enables to facilitate the transition in developing countries. The application of yield-enhancing technologies is potentially likely to produce crop income more than what farm households consume compared to farming activities with more traditional production techniques. Inorganic fertilizer is one of modern agricultural technologies that can enhance agricultural productivity. However, the increase in crop production by itself is insufficient to improve the welfare of farm households; rather, it has to be linked to the market. Therefore, I am motivated to evaluate the potential impact of adoption of inorganic fertilizer on smallholders’ commercialization as technological change enhanced land-use intensification and crop productivity in a land-scarce economy like in rural Tigrai, northern Ethiopia.MethodologyThe study utilizes cross-sectional farm household data collected in the 2014–2015 cropping season from a randomly selected 626 farm households in rural Tigrai, northern Ethiopia. Plot-level productivity is estimated using OLS with a control function approach. The causal impact of fertilizer adoption on smallholders’ commercialization is estimated using an endogenous switching regression model to control for selection problems associated with adoption decision. While factors affecting the probability and extent of inorganic fertilizer adoptions are analyzed using a double-hurdle model (hurdle 1 for probability of adoption and hurdle 2 for the extent of adoption).ResultsThe double-hurdle results show that large family size, a higher number of male and female adults affect positively and significantly adoption probability of inorganic fertilizer, while long plot distance, households headed by illiterate are key constraints for inorganic fertilizer adoption. Fertilizer adoption has positive and significant effect on plot-level productivity. Finally, adoption of inorganic fertilizer has a strong and positive impact on smallholders’ commercialization through productivity gain.ConclusionThe finding of this study confirms the potential role of technology adoption in facilitating rural transformation as higher production from adoption of improved agricultural technologies translates into surplus products and greater ability to integrate with the output market.
Highlights
Theory of development economics emphasizes how individuals transit out of poverty
The double-hurdle results show that large family size, a higher number of male and female adults affect positively and significantly adoption probability of inorganic fertilizer, while long plot distance, households headed by illiterate are key constraints for inorganic fertilizer adoption
The review of related literature for this study reveals that there are no comprehensive studies that have systematically examined the impact of inorganic fertilizer adoption on smallholders’ commercialization in Ethiopia
Summary
Theory of development economics emphasizes how individuals transit out of poverty. Adoption of improved agricultural technologies is one of the means that enables to facilitate the transition in developing countries. The application of yield-enhancing technologies is potentially likely to produce crop income more than what farm households consume compared to farming activities with more traditional production techniques. The application of yield-enhancing technology is potentially likely to produce crops more than what farm households consume compared to farming activities with more traditional production techniques [6,7,8,9]. The increase in production itself is insufficient; rather, it should be linked to the market This causal mechanism states that first farm households adopt modern agricultural technologies and improve plot-level productivity and generate surplus products. This surplus product will be exported to market for sale as households desire for a diverse consumption bundle and used to purchase other food and non-food items [6]. In the case of weather uncertainty, degraded land, in the semi-arid of Africa, the application of inorganic fertilizer presents an opportunity in reversing the rising trend of low agricultural productivity and food insecurity [4]
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