IDEAS home Printed from https://ideas.repec.org/a/ags/afjecr/315814.html
   My bibliography  Save this article

Potato and Tomato Supply and Yield Responses to Policy in Ethiopia

Author

Listed:
  • Shikur, Zewdie Habte

Abstract

Improving the productivity and profitability of farming activity is considered the key pathway out of poverty for many rural households. Agricultural productivity can be achieved through improving technical progress and increasing irrigation practice utilization. The motivation of this study is to figure out the underlying reasons for the low inelastic potato and tomato supply responses in the short and long-run. The paper attempts to estimate the responsiveness of potato and tomato yield and supply to demand, irrigated area, technical progress and industrial policy in Ethiopia. The study uses the error correction model and VARs with the aid of time series data. The results indicate that tomato supply is found to be responsive to demand signal and industrial policy shock in the short run but not to price incentive in the short-run as predicted. Tomato yield is responsive to demand signal, price incentive and industrial policy shock in the short‐run. The numerical magnitude of error correction coefficient for potato yield is 0.88 indicating about 88% of disequilibrium is corrected in a year. The implied departure from equilibrium is about 12%. Interventions in increasing irrigated area and the technical progress in potato and tomato production impact yield and output significantly. The speeds of adjustment towards equilibrium for tomato yield and output are quite fast, it points towards the highest response to technical progress. The results give emphasis to the need to strengthen technical progress and irrigation water supply through effective policies.

Suggested Citation

  • Shikur, Zewdie Habte, 2021. "Potato and Tomato Supply and Yield Responses to Policy in Ethiopia," African Journal of Economic Review, African Journal of Economic Review, vol. 9(4), September.
    • Handle: RePEc:ags:afjecr:315814
    DOI: 10.22004/ag.econ.315814
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/315814/files/Shikur.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.315814?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Marc Nerlove, 1979. "The Dynamics of Supply: Retrospect and Prospect," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(5), pages 874-888.
    2. Christiaensen, Luc & Demery, Lionel & Kuhl, Jesper, 2011. "The (evolving) role of agriculture in poverty reduction--An empirical perspective," Journal of Development Economics, Elsevier, vol. 96(2), pages 239-254, November.
    3. Evenson, Robert E. & Pray, Carl E. & Rosegrant, Mark W., 1999. "Agricultural research and productivity growth in India:," Research reports 109, International Food Policy Research Institute (IFPRI).
    4. Schiff, Maurice & Montenegro, Claudio E, 1997. "Aggregate Agricultural Supply Response in Developing Countries: A Survey of Selected Issues," Economic Development and Cultural Change, University of Chicago Press, vol. 45(2), pages 393-410, January.
    5. L. Rachel Ngai & Christopher A. Pissarides, 2007. "Structural Change in a Multisector Model of Growth," American Economic Review, American Economic Association, vol. 97(1), pages 429-443, March.
    6. Nestor Le Clech & Carmen Fillat‐Castejón, 2017. "International aggregate agricultural supply for grain and oilseed: The effects of efficiency and technological change," Agribusiness, John Wiley & Sons, Ltd., vol. 33(4), pages 569-585, September.
    7. Schneider, Uwe A. & Havlík, Petr & Schmid, Erwin & Valin, Hugo & Mosnier, Aline & Obersteiner, Michael & Böttcher, Hannes & Skalský, Rastislav & Balkovic, Juraj & Sauer, Timm & Fritz, Steffen, 2011. "Impacts of population growth, economic development, and technical change on global food production and consumption," Agricultural Systems, Elsevier, vol. 104(2), pages 204-215, February.
    8. R.R. Shoko & P. Chaminuka & A. Belete, 2016. "Estimating the Supply Response of Maize in South Africa: A Nerlovian Partial Adjustment Model Approach," Agrekon, Taylor & Francis Journals, vol. 55(3), pages 237-253, July.
    9. Kanwar, Sunil, 2006. "Relative profitability, supply shifters and dynamic output response, in a developing economy," Journal of Policy Modeling, Elsevier, vol. 28(1), pages 67-88, January.
    10. Mellor, John W, 1983. "Food Prospects for the Developing Countries," American Economic Review, American Economic Association, vol. 73(2), pages 239-243, May.
    11. Nigel Key & Elisabeth Sadoulet & Alain De Janvry, 2000. "Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 245-259.
    12. David E. Bloom & Jeffrey D. Sachs, 1998. "Geography, Demography, and Economic Growth in Africa," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 207-296.
    13. Francisco Alvarez-Cuadrado & Markus Poschke, 2011. "Structural Change Out of Agriculture: Labor Push versus Labor Pull," American Economic Journal: Macroeconomics, American Economic Association, vol. 3(3), pages 127-158, July.
    14. Hallam, David & Zanoli, Raffaele, 1993. "Error Correction Models and Agricultural Supply Response," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 20(2), pages 151-166.
    15. Collier, Paul & Dercon, Stefan, 2014. "African Agriculture in 50Years: Smallholders in a Rapidly Changing World?," World Development, Elsevier, vol. 63(C), pages 92-101.
    16. Michael Morris & Valerie A. Kelly & Ron J. Kopicki & Derek Byerlee, 2007. "Fertilizer Use in African Agriculture : Lessons Learned and Good Practice Guidelines," World Bank Publications - Books, The World Bank Group, number 6650, December.
    17. Douglas Gollin & Stephen Parente & Richard Rogerson, 2002. "The Role of Agriculture in Development," American Economic Review, American Economic Association, vol. 92(2), pages 160-164, May.
    18. Braulke, Michael, 1982. "A Note on the Nerlove Model of Agricultural Supply Response," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 23(1), pages 241-244, February.
    19. Richard Tiffin & Xavier Irz, 2006. "Is agriculture the engine of growth?," Agricultural Economics, International Association of Agricultural Economists, vol. 35(1), pages 79-89, July.
    20. Abdulai, Awudu & Rieder, Peter, 1995. "The Impacts of Agricultural Price Policy on Cocoa Supply in Ghana: An Error Correction Estimation," Journal of African Economies, Centre for the Study of African Economies, vol. 4(3), pages 315-335, December.
    21. Dercon, Stefan & Lulseged, Ayalew, 1994. "Coffee prices and Smuggling in Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 3(2), pages 108-108, October.
    22. Shujie Yao, 1996. "The determinants of cereal crop productivity of the peasant farm sector in Ethiopia, 1981-87," Journal of International Development, John Wiley & Sons, Ltd., vol. 8(1), pages 69-82.
    23. Suleiman Abrar & Oliver Morrissey & Tony Rayner, 2004. "Aggregate agricultural supply response in Ethiopia: a farm-level analysis," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(4), pages 605-620.
    24. Alemu, Zerihun Gudeta & Oosterhuizen, K. & van Schalkwyk, Herman D., 2003. "Grain-supply response in Ethiopia: An error-correction approach," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 42(4), pages 1-16, December.
    25. Fan, Shenggen & Hazell, P. B. R. & Thorat, Sukhadeo, 1999. "Linkages between government spending, growth, and poverty in rural India:," Research reports 110, International Food Policy Research Institute (IFPRI).
    26. Anubhab Gupta & Justin Kagin & J Edward Taylor & Mateusz Filipski & Lindi Hlanze & James Foster, 2018. "Is technology change good for cotton farmers? A local-economy analysis from the Tanzania Lake Zone," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 45(1), pages 27-56.
    27. Diao, Xinshen & Hazell, Peter & Thurlow, James, 2010. "The Role of Agriculture in African Development," World Development, Elsevier, vol. 38(10), pages 1375-1383, October.
    28. Zewdie Habte Shikur, 2020. "Agricultural policies, agricultural production and rural households’ welfare in Ethiopia," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-21, December.
    29. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Md. Idris Ali, 2023. "Investigating the Effect of Agricultural Crops on Agricultural GDP in Bangladesh," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(9), pages 2093-2098, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Amare, Mulubrhan & Jensen, Nathaniel D. & Shiferaw, Bekele & Cissé, Jennifer Denno, 2018. "Rainfall shocks and agricultural productivity: Implication for rural household consumption," Agricultural Systems, Elsevier, vol. 166(C), pages 79-89.
    2. Mulubrhan Amare & Bekele Shiferaw & Hiroyuki Takeshima & George Mavrotas, 2021. "Variability in agricultural productivity and rural household consumption inequality: Evidence from Nigeria and Uganda," Agricultural Economics, International Association of Agricultural Economists, vol. 52(1), pages 19-36, January.
    3. Nestor Le Clech & Carmen Fillat‐Castejón, 2017. "International aggregate agricultural supply for grain and oilseed: The effects of efficiency and technological change," Agribusiness, John Wiley & Sons, Ltd., vol. 33(4), pages 569-585, September.
    4. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941, Elsevier.
    5. Zewdie Habte Shikur, 2020. "Agricultural policies, agricultural production and rural households’ welfare in Ethiopia," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-21, December.
    6. McArthur, John W. & McCord, Gordon C., 2017. "Fertilizing growth: Agricultural inputs and their effects in economic development," Journal of Development Economics, Elsevier, vol. 127(C), pages 133-152.
    7. Junichi Yamasaki, 2017. "Railroads, Technology Adoption, and Modern Economic Development: Evidence from Japan," ISER Discussion Paper 1000, Institute of Social and Economic Research, Osaka University.
    8. Eberhardt, Markus & Vollrath, Dietrich, 2018. "The Effect of Agricultural Technology on the Speed of Development," World Development, Elsevier, vol. 109(C), pages 483-496.
    9. Amina Al Naabi & Shekar Bose, 2020. "Do Regulatory Measures Necessarily Affect Oman’s Seafood Export-Supply?," SAGE Open, , vol. 10(3), pages 21582440209, August.
    10. Dorosh, Paul A. & Thurlow, James, 2014. "Beyond agriculture versus nonagriculture: Decomposing sectoral growth–poverty linkages in five African countries:," IFPRI discussion papers 1391, International Food Policy Research Institute (IFPRI).
    11. Aimable Nsabimana & Patricia Funjika, 2019. "Mobile phone use, productivity and labour market in Tanzania," WIDER Working Paper Series wp-2019-71, World Institute for Development Economic Research (UNU-WIDER).
    12. Joachim Vandercasteelen & Seneshaw Tamru & Bart Minten & Johan Swinnen, 2017. "Secondary towns, agricultural prices, and intensification: Evidence from Ethiopia," LICOS Discussion Papers 39317, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    13. Jung, Yeonha, 2020. "The long reach of cotton in the US South: Tenant farming, mechanization, and low-skill manufacturing," Journal of Development Economics, Elsevier, vol. 143(C).
    14. Steven Glover & Sam Jones, 2016. "Can commercial farming promote rural dynamism in sub-Saharan Africa? Evidence from Mozambique," WIDER Working Paper Series 120, World Institute for Development Economic Research (UNU-WIDER).
    15. Diego Comin & Danial Lashkari & Martí Mestieri, 2021. "Structural Change With Long‐Run Income and Price Effects," Econometrica, Econometric Society, vol. 89(1), pages 311-374, January.
    16. Gangopadhyay, Kausik & Mondal, Debasis, 2021. "Productivity, relative sectoral prices, and total factor productivity: Theory and evidence," Economic Modelling, Elsevier, vol. 100(C).
    17. Ho, Chi Pui, 2015. "Population growth and structural transformation," MPRA Paper 68014, University Library of Munich, Germany.
    18. Arias-Vazquez , Francisco Javier & Lee, Jean N. & Newhouse, David, 2012. "The role of sectoral growth patterns in labor market development," Policy Research Working Paper Series 6250, The World Bank.
    19. Kjetil Storesletten & Bo Zhao & Fabrizio Zilibotti, 2019. "Business Cycle during Structural Change: Arthur Lewis' Theory from a Neoclassical Perspective," Cowles Foundation Discussion Papers 2191, Cowles Foundation for Research in Economics, Yale University.

    More about this item

    Keywords

    Farm Management; Productivity Analysis;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:afjecr:315814. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://www.ajol.info/index.php/ajer/index .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.