Impact of Small Scale Irrigation on Farm Technical Efficiency and Household Income in Amhara Regional State: A Stochastic Approach

Tadele Alamneh Woldegiorgis

doi:10.7176/dcs/11-5-01

Abstract

Agriculture is the main stay of Ethiopian population with a significant contribution to GDP. More recently the quest for more enhanced production and productivity has become an urgent issue of importance in the agriculture sector. The use of yield improving technological innovations is paramount importance towards this goal. As the potential to increase production and productivity by bringing more resources in to use is limited, the efficiency in which the farmers use available resources has received the utmost attention. This being the case, in this study effort has been made to assess the impact of small scale irrigation on farm technical efficiency and household income. The study was conducted in Amhara regional state. The survey data was collected from four kebeles in Sekela woreda of west Gojjam administrative zone in the year 2014/15 from 119 households. The data collected considered two groups of farm households, irrigation users and non-user households. Stochastic production frontier function with inefficiency variables had been applied to estimate technical efficiency. The finding of income variables indicate that land, access to irrigation, credit, education, labor, total livestock unit, and ox have significant contribution to household income. Among the input variables land and ox have positive and significant contribution to farm production whereas labor has negative contribution to farm production. The coefficient of land and oxen is 0.9 and 0.28 for irrigation users and 1.56 and 0.46 for irrigation non users respectively indicating greater marginal contribution of input variables when irrigation technology is in place. The inefficiency variables, age square , access to irrigation and land are found to improve farm efficiency while age of the household, gender, and dependency ratio have negative contribution to farm technical efficiency. Distance of the farmer’s house from development center and extension participation is not statistically significant. The mean technical efficiency of the whole sample was found to be 71% indicating that there is a possibility of improving the farm output on average by 29% if the technical efficiency of less efficient households could perform better to obtain the maximum attainable level of output. Keywords: Technical efficiency, Stochastic production frontier, Sekela woreda, Irrigation user and non-user. DOI: 10.7176/DCS/11-5-01 Publication date: May 31 st 2021

Highlights

The preposition that stated there exists no significance income differentials between the irrigation user households and non-user households was tested against the alternative preposition
The output of econometric analysis indicated that size of cultivated land, amount of family labor, access to irrigation, total livestock unit, amount of credit received, number of oxen are significant and have positive contribution to household income
Estimation of the production frontier of input variables included in the model indicated that the parameter estimates of cultivated land size and oxen power were found to be significant whereas family labor was found to be significant but the sign of the parameter coefficient is negative

Summary

Introduction

The highlands of Ethiopia, which most of the country’s agricultural potential, suffer from massive land degradation due to soil erosion caused by heavy runoff and deforestation and the low productivity of peasant agriculture. These trends, combined with repeated drought over the years, have substantially eroded the productive assets of communities and households. A loss of community assets (e.g. pasture and forest) has in turn led to increasing environmental degradation and it increased the pressure on farm, leading to declining investment in soil and water conservation practices. Households have become less capable to cope up shocks because they cannot accumulate saving (e.g. livestock holdings and food stores) (MoFED, 2002)

Methods

Results

Conclusion