IMPACTS OF CLIMATE CHANGE ADAPTATION PRACTICES ON SMALLHOLDER FARMERS' WELFARE IN THE BENCH MAJI ZONE, SOUTHWEST ETHIOPIA

Abstract

Climate change significantly impact smallholder farmers' welfare in agrarian economies like Ethiopia. The sustainability of agriculture relies on the farmer's ability to adjust their production systems in response to environmental and economic shocks and fluctuations. This study aimed to investigate the impact of climate change adaptation practices on smallholder farmers' welfare in the Bench Maji Zone, southwest Ethiopia. The research examined farmers' perceptions of climate change, their adaptations, factors influencing their choice of adaptation practices, and the impact of adopting single and combined adaptation strategies on farm income, downside risk, vulnerability to food insecurity, and the cost of risk. Cross-sectional data from 390 households in four climate-prone districts was collected using a standardized questionnaire, as well as rainfall and temperature data from 1989 to 2021. Data analysis involved the use of descriptive statistics and econometric models. The findings revealed that farmers understood climate-related changes and implemented various adaptation measures to mitigate risks. These strategies included crop diversification, soil and water conservation, improved varieties, and livelihood portfolio diversification. The multivariate probit model was employed to identify the factors determining farmer's choice of climate change adaptation strategies. The decision of the farming household to adopt crop diversification was positively influenced by frequent extension visits, access to climate information, and perceptions of moderate soil, while opinions of good soil and a moderate slope had a negative influence. Factors such as gender of the household head being male, farm size, distance from market, perception on the severity of erosion, and climate shocks positively affected soil and water conservation practices, while the perception of a flat slope had a negative influence. Education level, farm size, extension visits, access to climate information, climate shock, climate perception positively determined the adoption of improved varieties. At the same time, perceptions of good soil had a negative effect. Education level and climate shocks had a positive impact on livelihood portfolio diversification, while farm size and proximity to the market had a negative impact. A multinomial endogenous switching regression model was used to estimate the impact of adopting single and combined climate change adaptation practices on farm income and downside risk. When considering both observed and unobserved differences related to individual and combined adaptation methods, farm households that use climate change adaptation techniques, either alone or in combination, tend to see increased farm income and a notable decrease in downside risk. Results from estimating the multinomial endogenous treatment effect model showed that implementing climate change adaptation strategies together effectively reduced vulnerability to food insecurity. A quantile moment approach was applied to estimate the cost of risk. The findings reveal that the risk premium for adopting any climate change adaptation techniques, whether alone or in combination, is lower than for non-adoption in the lowest quantile. These findings underscore the importance of implementing climate change adaptation strategies in agriculture to reduce susceptibility to food insecurity during uncertain climate events. Therefore, integrated strategies, particularly the comprehensive adoption of all three strategies is needed to enhance income stability amid climate variability.