Smallholder Commercialization, Performance and Household Demographic Cycle:  Some Results from a survey in Lume Wereda, Et...
Background and objective <ul><li>Agricultural commercialisation is very low in Ethiopia.  </li></ul><ul><li>CSA (2010), fo...
Background and objective <ul><li>Over the past decade, different kind of interventions including small scale irrigated veg...
Specific objective <ul><li>To assess project outcomes in terms of commercialisation and other performance indicators – use...
Data and  <ul><li>Both household survey and focus group discussions were used to collect primary data. </li></ul><ul><li>T...
Some results
Commercialisation – output side <ul><li>Commercialisation (proportion of output value sold) increased, </li></ul><ul><li>T...
<ul><li>Apart from increase in cash income, the study shows that the number of cash crop growers increased after the inter...
Effect of intervention – the changing role of crops   <ul><li>though nearly all farmers continue to grow food crops and, i...
0 1 2 0 10000 20000 30000 Cash income from farming m Rented land (ha) Fitted values 0 2 4 6 8 0 10000 20000 30000 Cash inc...
<ul><li>How young farmers react to the intervention?  </li></ul><ul><ul><li>Do they seize the new opportunity? </li></ul><...
Decomposing sample farmers into four age groups  Age group   Proportion  (% in sample) 25 years or less (young)  – 17%,  2...
How young households perform  (in terms of average  income) Income/prosperity improves as households’ move to their next s...
What explains difference in performance <ul><li>Young households are resource poor. </li></ul><ul><li>Does this affect the...
Irrigation & production for market among different hhs <ul><li>Young, land poor farmers  </li></ul><ul><li>allocated the g...
Additional Dimensions to Agricultural Commercialisation <ul><li>Young, small farmers, however, operate badly in terms of  ...
Summary/conclusion <ul><li>The intervention  enables small farmers to diversify their outputs and   helps for enhanced par...
<ul><li>Though measuring commercialisation in terms of  ‘the percentage of crop production marketed by a farm or household...
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Smallholder Commercialization, Performance and Household Demographic Cycle:

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Smallholder Commercialization, Performance and Household Demographic Cycle:

  1. 1. Smallholder Commercialization, Performance and Household Demographic Cycle: Some Results from a survey in Lume Wereda, Ethiopia July 19 – 21 Addis Ababa A study commissioned and conducted by Future Agriculture Consortium ( www.future-agricultures.org )
  2. 2. Background and objective <ul><li>Agricultural commercialisation is very low in Ethiopia. </li></ul><ul><li>CSA (2010), for instance indicates that 64 per cent of grain produced by smallholders was used for own consumption. (only 16 – 18% grain produced was marketed). </li></ul><ul><li>This is indicates that the driving forces for agricultural commercialisation are neither sufficient nor attractive: </li></ul><ul><ul><li>Internal dynamism within the smallholder sector makes asset accumulation and growth in per capita production hard. </li></ul></ul><ul><ul><li>Externally, lack/weak access to farm land and credit complicates the situation. </li></ul></ul><ul><li>Unless smallholders especially young farmers get some kind of coordinated support, this kind of semi-subsistence agriculture will persist. </li></ul>
  3. 3. Background and objective <ul><li>Over the past decade, different kind of interventions including small scale irrigated vegetable production and diversification into high value cash crops have been introduced. </li></ul><ul><li>Such kind of interventions have multiple objectives including: </li></ul><ul><ul><li>commercialization of smallholder agriculture through product diversification and better market access, </li></ul></ul><ul><ul><li>a means to overcome the negative effect of reduced access to land and declining farm size especially on young farmers. </li></ul></ul><ul><li>This study aims to appraise one of such interventions – </li></ul><ul><ul><li>small-scale irrigation schemes launched in 2005 in Lume district to help small farmers produce high-value vegetables (onion, tomatoes, and green pepper). </li></ul></ul>
  4. 4. Specific objective <ul><li>To assess project outcomes in terms of commercialisation and other performance indicators – use of purchased inputs, productivity and employment. </li></ul><ul><li>How these outcomes vary across different hhs? </li></ul><ul><ul><li>What is the effect of the intervention on young households. </li></ul></ul><ul><ul><li>How young households exploit the new opportunity. </li></ul></ul><ul><ul><li>Hypothesis: </li></ul></ul><ul><ul><li>Young households own few productive resources. This might hinder their participation in the commercialisation scheme but they might seize the new opportunity through </li></ul></ul><ul><ul><ul><li>allocating relatively larger portion of their land to high-value crops or </li></ul></ul></ul><ul><ul><ul><li>higher productivity. </li></ul></ul></ul>
  5. 5. Data and <ul><li>Both household survey and focus group discussions were used to collect primary data. </li></ul><ul><li>The survey includes 160 farm households both from participant and non-participant groups (based on a 50:50 ratio), though on average not more than 25% of farmers take part in the program, </li></ul><ul><li>Then farmers in selected villages were stratified based on their landholding and households selected randomly from different wealth strata. </li></ul><ul><ul><li>based on recall data (for post-intervention period) and baseline data for pre-intervention period. </li></ul></ul><ul><li>the study employed largely descriptive methods </li></ul><ul><li>(initial results might be tested further through multivariate r egression econometric analysis). </li></ul>
  6. 6. Some results
  7. 7. Commercialisation – output side <ul><li>Commercialisation (proportion of output value sold) increased, </li></ul><ul><li>This was accompanied with changes in cropping pattern and crops’ role </li></ul>2. 5 2 17 26 11 24 7 5 4 5 . 10 . 16 12 14 12 12 6 . 4 5 0 10 20 30 20 40 60 80 100 20 40 60 80 100 After (N=80) Before (N=80) Value of crops sold (as total harvest value)
  8. 8. <ul><li>Apart from increase in cash income, the study shows that the number of cash crop growers increased after the intervention. </li></ul><ul><ul><li>About 14% of farm land allocated for the production of staple food crops in pre-intervention period, for instance, turned into cash crops production. </li></ul></ul><ul><ul><li>Similarly, the proportion of farmers that allocated half or more of their land to cash crops (both old and new) increased by about 23% and reached 68%. </li></ul></ul>Effect of intervention – the changes in land use
  9. 9. Effect of intervention – the changing role of crops <ul><li>though nearly all farmers continue to grow food crops and, in most cases, they tried to meet their own food needs from own production, </li></ul><ul><ul><li>Tef turned from a commercial to more of subsistence crop (or relatively less important commercial crop). </li></ul></ul><ul><ul><ul><li>As a cash and also a food crop, tef brought on average about 60% of the cash income prior to the intervention. Its share, however, declined to 13% after the intervention. </li></ul></ul></ul><ul><ul><li>Similarly, the share of wheat and haricot beans in generating cash declined from 14% and 10%, respectively, to less than 5 %. </li></ul></ul><ul><ul><li>In contrast, new crops like onion and tomato contribute about two-thirds of household cash income and become the most important commercial crops. </li></ul></ul>
  10. 10. 0 1 2 0 10000 20000 30000 Cash income from farming m Rented land (ha) Fitted values 0 2 4 6 8 0 10000 20000 30000 Cash income per farm Use of hired labor 0 20 40 60 80 100 0 10000 20000 30000 Cash income per farm Interest rate farmers paid Fitted values Interest rates paid Use of rented land/participation in land rental market Participation in factor markets among farmers operated at different commercial level
  11. 11. <ul><li>How young farmers react to the intervention? </li></ul><ul><ul><li>Do they seize the new opportunity? </li></ul></ul><ul><ul><li>Does it help them to overcome emerging challenges (like declining farm land)? </li></ul></ul><ul><ul><li>What are the lesson and implication? </li></ul></ul>Young farmers and commercialisations
  12. 12. Decomposing sample farmers into four age groups Age group Proportion (% in sample) 25 years or less (young) – 17%, 25 and 39 yrs (young -2 nd cycle) – 35%, 39 and 55 yrs (old) – 39%, older 55 yrs (seniors) – 9%. These four groups assumes to represent farm households found at their different demographic cycle.
  13. 13. How young households perform (in terms of average income) Income/prosperity improves as households’ move to their next stage in their demographic cycle? Why? Better access to productive resources like farmland.
  14. 14. What explains difference in performance <ul><li>Young households are resource poor. </li></ul><ul><li>Does this affect their engagement in commercialisation? </li></ul><ul><ul><li>- Yes and No, depending on how we measure commercialisation. </li></ul></ul>
  15. 15. Irrigation & production for market among different hhs <ul><li>Young, land poor farmers </li></ul><ul><li>allocated the greater portion of their land to cash crops </li></ul><ul><li>sold a greater proportion of their output. </li></ul>
  16. 16. Additional Dimensions to Agricultural Commercialisation <ul><li>Young, small farmers, however, operate badly in terms of </li></ul><ul><ul><li>crop sales (volume, income) </li></ul></ul><ul><ul><li>use of non-family labor (hire only 15 man-days, about one third of the average), </li></ul></ul><ul><ul><li>use of rented land (but 87% of their cultivated farmland is rented land). </li></ul></ul>
  17. 17. Summary/conclusion <ul><li>The intervention enables small farmers to diversify their outputs and helps for enhanced participation in output markets but with slightly different outcome </li></ul><ul><ul><li>It contributes for reducing poverty and improving livelihood among the poor (generated more cash income per unit farmland) </li></ul></ul><ul><ul><li>it is more of a commercialization tool among relatively land-rich households. </li></ul></ul><ul><li>Market-based livelihood improving programs should not limited to technical interventions. Institutional factors (markets – factor markets) are also important in optimising the impact of interventions. </li></ul>
  18. 18. <ul><li>Though measuring commercialisation in terms of ‘the percentage of crop production marketed by a farm or household’ has a big advantage as it treats commercialisation as a continuum, thereby avoiding crude distinctions between &quot;commercialised&quot; and &quot;non-commercialised&quot; farms, this simple index might mislead and should be used carefully. </li></ul>Summary/conclusion

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