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How effective is Ethiopia’s agricultural growth program at improving the total factor productivity of smallholder farmers?

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Abstract

The Agricultural Growth Program (AGP) in Ethiopia is a multifaceted investment program supporting agricultural productivity and the commercialization of smallholder farmers. The AGP is expected to positively affect household food security by increasing agricultural productivity and production. The extent to which the AGP has affected farmers’ economic efficiency and productivity is an interesting policy issue. This study employed a switching regression with the stochastic frontier model to investigate differences in total factor productivity (TFP) between beneficiary and non-beneficiary farmers in AGP. It also estimated the role of technological progress, technical and scale efficiencies in conditioning TFP. Results show that participation in AGP provided significantly higher TFP compared to non-participation. While technical progress did contribute to the observed increase in output, improving technical efficiency has also the potential to increase output by as much as 40% with existing technology and resources. The study suggests that there are opportunities to improve productivity growth and food security in smallholder farms over time through more active research and extension activities in Ethiopia. In the AGP, technical progress has been achieved in the use of irrigation, high yielding crop varieties, modern agricultural machinery, fertilizers, and pesticides. Since technical change is the most important source of the growth in productivity, policy changes that support the use of modern agricultural inputs directly or indirectly is likely to improve the agricultural sector in Ethiopia.

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Notes

  1. I suppress the t and i notations from the equations for ease of presentation.

  2. χ2(20) = 85.58 with p < 0.001 for households in the AGP districts and χ2(21) = 57.71 with p < 0.001 for households in the non-AGP districts.

  3. χ2(8) = 567.00 with p < 0.001 for households in the AGP districts and χ2(8) = 219.38 with p < 0.001 for households in the non-AGP districts.

  4. Χ2(6) = 155.82 with p < 0.001 for households in the AGP districts and Χ2(6) = 96.88 with p < 0.001 for households in the non-AGP districts.

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Authors and Affiliations

  1. Environment and Climate Research Center, Policy Studies Institute, P.O.Box 2479, Addis Ababa, Ethiopia

    Hailemariam Teklewold

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Teklewold, H. How effective is Ethiopia’s agricultural growth program at improving the total factor productivity of smallholder farmers?. Food Sec. 13, 895–912 (2021). https://doi.org/10.1007/s12571-021-01175-7

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