MULTIPURPOSE CABBAGE TREE (Moringa stenopetala) BASED AGROFORESTRY PRACTICE, MARKET PARTICIPATION DECISIONS AND ITS IMPACT ON FARM HOUSEHOLDS’ WELFARE IN SEGEN HIZBOCH AREA ZONE OF SOUTHERN ETHIOPIA

Abstract

Ethiopia is endowed with great biodiversity and the population has access to potentially many underutilized plant species with both nutritional and medicinal benefits. Moringa stenopetala here after named Moringa, is one of the most valuable and multi-purpose underutilized plant. This study analyzes Moringa tree-based agroforestry practice, market participation decision, and its impact on smallholder farmers‟welfare in Segen area people zone to fill the existing knowledge gap. Descriptive statistics and econometric models were employed to analyze the data. Tobit model, Double Hurdle model, Endogenous Switching Regression model, Generalized Propensity Score Approach, and Seemingly Unrelated model were used to identify the determinants of adoption of Moringa tree-based agroforestry practice, determinants of intensity of market participation decision, potential welfare impact of the status and intensity of market participation on farm households, and their interdependence respectively. A cross-sectional data from 385 smallholder farmers were used in the analysis. The Tobit model result revealed that age, farm size, family size, training in any agroforestry-related activity, access to extension services, awareness of the market for Moringa product, livestock owned, and economic incentives of Moringa plant positively and significantly influence the intensity of MTBAFP adoption. Education, family size, contacts with extension agents, farm size, training, livestock owned, and access to transportation means were positively and statistically significant in determining both market participation and intensity of participation. Similarly, access to Moringa market information encourages market participation whereas the distance to market exerts a negative influence on market participation. Membership to rural cooperative group and receiving market assistance from NGOs increase intensity of market participation. Endogenous Switching Regression (ESR) model that accounts for selection bias was used in impact assessment. This was further expanded to generalized propensity score (GPS) approach to evaluate the effects of the level of market participation on welfare of producers. Results from ESR show that several demographic, institutional, socio-economic, and market factors affect participation decision and welfare of farm households. Overall, Moringa market participation has a positive and significant impact on rural farmers‟welfare, but substantial differencial between the groups are observed. Participation in the Moringa market increases their crop income, per capita annual consumption expenditure and per-capita daily calorie intake by 24%, 29%, and 45% respectively compared to non-participants. This shows the importance of Moringa market participation in improving the welfare of poor farmers in the study area. Results from GPS are also similar as the welfare of households has increased with the intensity of Moringa market participation. Policymakers, agricultural planners, institutions and organizations involved in Moringa production and distribution need to consider the key variables (age, family size, livestock rearing, extension advice, agroforestry training, efficient XVII use of available farmlands, awareness on marketing potential and economic incentives of Moringa plant) identified in this study to forecast more accurately, future Moringa plant adoption. Similarly, to expand the market for Moringa production, designing appropriate support from different stakeholders, encouraging and assisting Moringa associations and linking them with markets, designing market information transmission mechanism, improving marketing extension services, training, infrastructural facilities and providing farmers with the chance of attending basic education is critical. Furthermore, policies aimed at reducing the transaction costs of accessing markets, promoting the tree via different Media, working on rural institution capacity building, encouraging value addition and market linkages among diverse market players, pest/disease control, access to secure markets; establishing information sources will increase both intensity of adoption and market participation