IMPACT OF IRRIGATION ACCESS ON POTATO PRODUCTION EFFICIENCYAND RURAL HOUSEHOLDS’ POVERTY IN EAST GOJJAM ZONE OF ETHIOPIA

Abstract

The growing gap between food demand and supply in Ethiopia and hence rural poverty is mainly attributed to the low productivity of the agricultural sector. Access to irrigation by smallholder farmers is believed to enhance production efficiency, and hence considered as a cornerstone of food security and poverty reduction. The objective of this study was to assess the impact of irrigation access on potato production efficiency and alleviating farm households’ poverty in east Gojjam zone. A random sample of 288 rural households was selected for the study using systematic random sampling method. Stochastic frontier analysis was used for estimating production efficiency and a tobit model was used to identify the determinants of efficiency. Propensity score matching method was used to evaluate the impact of participation in irrigation farming on farm households’ potato production efficiency and welfare. The results of the study indicated that variable inputs such as land, seed and oxen power positively and significantly affected potato output. The estimated mean technical, allocative and economic efficiency scores for irrigation user were 77, 74.5 and 0.57 and for non-user households they were 0.63, 0.63 and 40 percent, respectively showing potato production inefficiencies among sample farm households. The significant factors affecting allocative and economic efficiencies in potato production are mainly access to irrigation, loan size, extension contact, livestock holding, agro-ecology, off/non-farm income and sex of household head. Poverty indices developed from consumption expenditure using FGT formula were used to identify the poor. About 74.4% and 72.3% of the sample households gained annual per adult equivalent income which is more than the income poverty line in irrigated and non-irrigated farming systems, respectively. The income poverty gap and severity indices for irrigation users were 0 .19 and 0.14 and for non-users they were found to be 0.22 and 0.17, respectively. Results further show that participation in irrigation farming significantly increased annual expenditures, technical, allocative and economic efficiencies of participants by 459.05 Birr (11.7%), 0.035 (4.9%), 0.030 (4.08%) and 0.039 (7.4%), respectively compared to non-participants indicating the significant production efficiency and welfare improvement due to participation in irrigated farming.