Impact of Small-Scale Irrigation Scheme on Potato Farmers Technical Efficiency and household Income in Lemu-Bilbilo District, Arsi Zone, Oromia National Regional State, Ethiopia

Abstract

production efficiency and income of potato grower’s smallholder farmers. This study, therefore, aims to identify factors affecting participation in SSI and its impact on household income and potato farmers technical efficiency in Lemu-Bilbilo district of Arsi zone, Oromia region, Ethiopia. The study used cross-sectional household data collected in 2022/2023 from 371 randomly selected sample households. Both descriptive statistics and econometrics model (stochastic frontier model and endogenous switching regression) were used. The results of the stochastic frontier model (SFA) shows that potato output was positively and significantly influenced by input variables (land, seed, labour and DAP for both irrigators and non-irrigators farms). The estimated technical efficiency scores for irrigators and non-irrigators were 65 and 62 percents, respectively, showing irrigators households were relatively more technically efficient in potato production than non-irrigators households in the study area. The results of probit model shows that participation in SSI was positively influenced by education, total livestock owned, farm size, extension contact and cooperative membership whereas market distance and irrigation water distance influenced participation in SSI negatively. Finally, the results obtained from the endogenous switching regression model showed that if irrigators had decided to not irrigate, their average income and technical efficiency would have decreased by 19617.97 ETB and 0.07%, respectively. Similarly, had non irrigators decided to irrigate, their average income and technical efficiency would have increased by 8240.41ETB and 0.03% respectively. The study recommends, policymakers and development organizations should consider small scale irrigation as main strategy to increase smallholder potato farmer’s technical efficiency and household income. This study also argues that, institutional and government assistance in the areas of education, extension service, infrastructure development (particularly access to markets), and cooperatives is critical.