Abstract:
Ethiopian smallholder farmers are the most vulnerable group of societyto the effects of
climate variabilitybecause they have nature dependent economic system. This study
examinedtheeffects of climate variability on five major cereals yield,crop income and rural
labor displacementin thecentral highlands and Arsi grain plough farming systems of Ethiopia.
The seven round unbalanced panel data (1994-2009) collected by Ethiopian Rural Household
Survey from 15 kebeles of the seven farming systems was the base to use panel data in this
study. After managing one round survey in 2014 from six sampled kebeles of the two farming
systems the research hadeight-round unbalanced panel data (1994-2014). Meteorological
data from central observatory of Ethiopia showed that long run trend of cropping season
temperature and rainfall of the country showed greater variation with frequent extremes in
short periods of interval. The stochastic frontier regression result revealed that inorganic
fertilizer and draught power significantly increased cereals yield. Cropping season rainfall
and temperature have different effect on yield of the five cereal crops as to the model result.
Cropping season temperature increment would increase yield of wheat and barley, while it
reduces teff, maize and sorghum yield. Yield ofteff and barley would significantly increase if
there were cropping season rainfall rise in the study area.GLS regression result revealed that
shocks sourced from climate variabilitysignificantlyreduced smallholders’ technical efficiency
of producing cereals. Fixed effect regression result disclosed negative and significant effect of
climate variability elements including cropping season rainfall, temperature, shocks and
rainfall inconsistencies on smallholders’ crop income. The model result also indicated
positive effect of agricultural inputs such as cropland and draught power on crop income.
Smallholders’ in the two farming systems had 12.04% probability of adopting thefour
alternative strategies (changing the sowing time, modern technology, alternative income
sources and conservation) at a time. MVP model result showed that covariates
includingrainfallshortage, distance from the main road and crop price increment were
common factors that stronglyaffectthe probability of adoptingall thestrategies simultaneously.
Frequent cropping season rainfall shortage initiated smallholders to adopt strategies related
to changing sowing time and alternative income sources. The studyalso identified that most of
the rural migrants were youth who were below 25 years. Instrumented random effect two
stage least squares regression result showed that crop income, education, livestock owned,
participation in off-farm activities and draught powersignificantly reducedthe proportion of
family members who displaced due to climate variability. Any of the parameters that reduce
crop income would directly aggravate the labor displacement from the study area. In general,
climate variability sourced from rainfall inconsistencies commonlyaffectedthe crop
production, income and rural labordisplacement in the two farming systems of Ethiopia.Crop
production inputs like fertilizershould be made easily available for households of the study
area to use them as to the standard level to enhance cereals yield.Both material and labor
budget should be ready to reduce effect of pest infestation and harvesting season rainfall on
smallholders’ crop yield and income. Crop yield and income of households could be improved
if there is due effort to have consistent moisture availability.Displacement of the rural labor
could be reduced if alternative income sources are there to supplementhousehold’s main
source of income, crop production.