Production Efficiency, Commercialization of Cereal Crops and Multidimensional Poverty among Farm Households in Major ‘Teff’ Growing Areas of Ethiopia
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Date
2021-12-17
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Addis Ababa University
Abstract
The majority population in SSA including Ethiopia is multidimensional poor, resides in rural areas, and depends on smallholder agriculture for their livelihood. Hence, poverty alleviation and agricultural productivity growth remain the primary policy agenda for many developing countries in SSA. In Ethiopia, cereals are the principal staple crops strategic for poverty alleviation, suggesting that the prospect of increasing cereal outputs has crucial policy importance to design anti-poverty strategies and thereby improve smallholder welfare. This dissertation, therefore, examined the effect of technical efficiency and commercialization of cereal crops on household multidimensional poverty in rural Ethiopia. The study followed a mixed-method research design in which more emphasis was given for quantitative research design with an embedded qualitative research approach. Primary data was generated from randomly selected 392 sample farm households in the year 2019/2020 from major teff-growing areas of Ethiopia using structured questionnaire, key informant interviews (KIIs), and focus group discussions (FGDs). Descriptive and inferential statics was applied to explain farm households’ characteristics. The study also used a wide range of analytical and econometric models: Stochastic Meta-Frontier, Tobit Model, Multidimensional Poverty Index (MPI), Vulnerability Analysis, Fractional Logit Model, IV Tobit Model, CMP, DoseResponse Function, and 3SLS Model to address the objectives of the study. Thematic analysis was applied to analyze qualitative data. The result of the study indicated that the average technical efficiency score of farm households was found to be 58%, inferring that about 36% of cereal output is lost due to inefficiency. The results showed that the adoption of high-yielding varieties together with production methods improves production efficiency. Moreover, sex of the household head, age of the household head, mobile phone ownership, cooperative membership, access to modern inputs, and stress incidence were found the major determinants for efficiency. The study, hence, asserts that the cereal output can be improved with the current input mix and technology. The results revealed that, on average, about 38% of cereal crops produced were commercialized, suggesting a semicommercialized production system. The simultaneous model estimates coffered that cereal commercialization significantly improves the use of production inputs and cereal yield at 1% level. Bi-directional causality between commercialization and technical efficiency was also confirmed at 1% level. This means that enhancing commercialization among cereal farmers helps to improve land and labor productivity and thereby brings an upward shift in the production technology. Moreover, the results showed that the extent of cereal commercialization positively determined by sex of the household head, land size, credit service, mobile phone ownership, improved seed, and agricultural assets, while negatively influenced by family size, dependency ratio, and non-farm employment. The incidence of poverty, the mean deprivation scores, and MPI were found to be 57.9%, 44.1%, and 31.2%, respectively, implying a higher proportion of farm households were classified as multidimensional poor. The study showed that improving technical efficiency and commercialization of farm households significantly decreases MPI. Overall, information asymmetry, cooperatives, input and output market integration, modern technologies, incidence of crop stresses, land reform and land rent in/out practices, improved livestock breeds, rural infrastructure, and services were among key areas of policy recommendations
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Keywords
Cereal crops, Input use, Production methods, Production efficiency, Commercialization, Multidimensional poverty, Ethiopia